Pre-Market Update for 12/30/2016

Small-Caps Edge Higher

8:00am (EST)

The bears got their second-straight win although the damage done was minimal with mixed results as the small-caps bucked the trend. The bulls still need to hold key support levels ahead of the weekend along with keeping volatility under control. The mini trading range is still intact but could be cracked on lower lows. Needless to say, although Wall Street will be away, today’s closing action will be important to watch.

The Dow dipped 14 points, or 0.1%, to close at 19,819. The blue-chips made a lower high than Wednesday to 19,878 while failing lower resistance at 19,900-20,000. Support at 19,800 was breeched by a 12-pack following the test to 19,788. Backup support is at 19,600-19,500.

The S&P 500 slipped less than a point, or 0.03%, to end at 2,249. The index made a run to 2,254 but failed lower resistance at 2,250-2,275. The midday drip to 2,244 split fresh support at 2,240-2,235 with a close below the latter a yellow light.

The Nasdaq gave back a 6-pack, or 0.1%, to finish at 5,432. Tech tested a high just north of 5,450 at the start of Thursday’s action but failed to hold this level. Additional resistance remains at 5,475-5,500. Support is at 5,425-5,400 with a close below the later being a warning sign.

The Russell 2000 gained 2 points, or 0.2%, to settle at 1,363. The small-caps kissed 1,367 shortly after the open with fresh resistance at 1,370-1,375 holding. Upper support at 1,360-1,350 stood firm following the intraday dip to 1,357 afterwards. A close below the latter keeps risk open to 1,340-1,335.

The S&P 500 Volatility Index ($VIX, 13.37, up 0.42) stayed elevated throughout the session and tested a high of 13.71. The bulls held upper resistance at 12.50-13.50 with a close above the latter being a bearish development heading into next week. Support is at 11.50 on a close below 12.50.

I could have New Trades after the open, depending on the action so stay locked-and-loaded in case I take action.

From desk to press, futures look like this: Dow (+49); S&P 500 (+6); Nasdaq 100 (+17)


Momentum Options Play List

Closed Momentum Options Trades for 2016: 87-37 (70%). 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.


Sony (SNE, 28.15, down $0.13)

January 27.50 puts (SNE170120P00027500, $0.35, flat)

Entry Price: $0.30 (12/23/2016)
Exit Target: $0.60
Return: 17%
Stop Target: None

February 27 puts (SNE170217P00027000, $0.65, flat)

Entry Price: $0.65 (12/23/2016)
Exit Target: $1.30
Return: 0%
Stop Target: None

Action: Yesterday’s low tapped $28.12. Support is at $28-$27.75 with a move below the latter getting this trade going. Resistance is at $28.25-$28.50.


Array Biopharma (ARRY, $8.68, up $0.03)

ARRY March 10 calls (ARRY170317C00010000, $0.90, flat)

Entry Price: $0.85 (12/21/2016)
Exit Target: $1.70
Return: 6%
Stop Target: None

Action: Support at $8.50-$8.25. Thursday’s peak reached $8.77. Resistance is at $8.75-$9.


CVS Health (CVS, $79.00, down $0.04)

CVS January 82.50 calls (CVS170120C00082500, $0.35, flat)

Entry Price: $0.68 (12/20/2016)
Exit Target: $1.40
Return: -49%
Stop Target: None

Action: Resistance is at $80-$80.50 and the 50-day moving average. Support is at $78.50-$78. I could close this trade today if shares aren’t pushing $80 to reserve the remaining premium for new trades.


Viavi Solutions (VIAV, $8.30, up $0.05)

VIAV March 9 calls (VIAV170317C00009000, $0.24, flat)

Entry Price: $0.37 (12/8/2016)
Exit Target: $1.00
Return: -35%
Stop Target: None

Action: Resistance is at $8.50-$8.60. Support is at $8.25-$8.