Mid-Market Update for 12/20/2016

VIX Taps 11.50

2:45pm (EST)

The bulls are pushing higher highs as the Dow has come within 13 points of clearing 20,000. Just as important, the S&P 500 Volatility Index ($VIX, 11.71, down 0.49) has tested a low of 11.50. It would be a bullish signal if volatility closes below this level.

The Dow is up 68 points to 19,951 while the S&P 500 is gaining 4 points to 2,267. The Nasdaq is advancing 16 points to 5,473 and the Russell 2000 is higher by 9 points to 1,380.

Today’s update is a little short as I have been busy with trade setups. I do have a new trade I want to get us into with another trade probably coming out in the morning. For now, I like CVS and a stock I profiled in Monday’s Pre-Market update.


Momentum Options Play List

Closed Momentum Options Trades for 2016: 87-36 (71%). All trades are dated and time stamped so new subscribers can look at the past history to see how the trades have played out.

Do not risk more than 5% of your trading account on any one trade but do try to take all of the trades. Please remember, all “Exit Targets” and “Stop Targets” are targets. You should not have any “Hard Stops” entered to close any trades or “Exit Orders” in your brokerage account unless I list one. I will send out a “Profit Alert” or “New Trade” if I want you to close a position or if a new trade comes out. Otherwise, follow instructions at all times in the 9 a.m. and 12 p.m. – 1 p.m. updates. Also, I will usually give you a heads-up if I think I’m going to send an email outside of these time frames.

New Trade!

CVS Health (CVS, $79.76, down $0.17)

CVS January 82.50 calls (CVS170120C00082500, $0.68, down $0.04)

Action: I like these call options at current levels and you can use a Limit Order up to 80 cents to get the best fills. These are the regular CVS January 82.50 call options that expire on January 20th, 2017. I will provide the parameters of the trade in tomorrow’s Pre-Market update.


Current Trades

Viavi Solutions (VIAV, $8.41, up $0.06)

VIAV March 9 calls (VIAV170317C00009000, $0.32, down $0.03)

Entry Price: $0.37 (12/8/2016)
Exit Target: $1.00
Return: -12%
Stop Target: None

Action: Resistance is at $8.50-$8.75. Short-term support is at $8.40-$8.35 followed by $8.25-$8.


TiVo (TIVO, $21.05, up $0.25)

TIVO January 22.50 calls (TIVO170120C00022500, $0.35, flat)

Entry Price: $0.33 (11/30/2016)
Exit Target: $0.70
Return: 6%
Stop Target: None

Action: Support is at $20.50-$20 and the 50-day moving average. Resistance is at $21.25-$21.50.