Pre-Market Update for 1/5/2017

Ho, Ho, Ho, Bulls Make it Two-in-a-Row

8:00am (EST)

The Santa Rally is now official and the bulls managed a slim 23-point win on the Dow with the other major indexes also finishing higher. Although this is typically a bullish sign, nothing can be taken for granted with earnings season right around the corner. However, the short-term outlook remains bullish with all-time highs back in play.

The Dow advanced 60 points, or 0.3%, to settle at 19,942. The blue-chips held green throughout the session for the second-straight day after reaching a peak of 19,956. Upper resistance at 19,900-20,000 and the record high of 19,987 held with a close above the latter being a bullish development. Support remains at 19,800-19,725.

The S&P 500 soared a baker’s dozen, or 0.6%, to close at 2,270. The index tested a high of 2,272 while pushing lower resistance at 2,275-2,300. The all-rime high is at 2,277 that was set on December 13th. Support is at 2,250.

The Nasdaq jumped 48 points, or 0.9%, to end at 5,477. Tech opened just below the 5,450 level at 5,440 while trading to a high of 5,482. Fresh resistance is now at 5,500-5,525 and the lifetime high of 5,512. Support has moved up to 5,450-5,425 with a close below 5,400 now a clear signal to go short.

The Russell 2000 soared 22 points, or 1.6%, to finish just below 1,388. The small-caps also held positive territory throughout Wednesday while making a run to nearly 1,389. Fresh resistance and blue-sky territory is at 1,400-1,425 and the 52-week high of 1,392. Support has moved up to 1,375-1,370.

The S&P 500 Volatility Index ($VIX, 11.85, down 1.00) fell another 8% while after trading down to 11.63 intraday. The close into lower support at 12.50-11.50 was a bullish signal. Resistance has moved down to 13.50 followed by 14.50-15.

I could have a “piggy-back” trade this morning as well as another New Trade if Tech stays strong. Stay close to your email inboxes in case I take action.

From desk to press, futures look like this: Dow (-5); S&P 500 (-1); Nasdaq 100 (-3).


Momentum Options Play List

Closed Momentum Options Trades for 2017: 0-0 (0%). 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.


Tower Semiconductor (TSEM, $19.47, up $0.31)

TSEM February 20 calls (TSEM170217C00020000, $0.60, up $0.05)

Entry Price: $0.55 (1/3/2017)
Exit Target: $1.10 (Limit Order on 1/3)
Return: 9%
Stop Target: None

Action: Fresh resistance is at $19.50-$19.75. Support is at $19.25-$19. Wednesday’s high tapped $19.55.


Sony (SNE, $28.58, up $0.29)

January 27.50 puts (SNE170120P00027500, $0.35, down $0.05)

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

February 27 puts (SNE170217P00027000, $0.65, down $0.10)

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

Action: An official “death cross” formed yesterday with the 50-day moving average closing below the 200-day moving average. This is a bearish development but there is risk to $28.75-$29 on a continued backtest. Support is at $28.25-$28.


Array Biopharma (ARRY, $9.17, up $0.61)

ARRY March 10 calls (ARRY170317C00010000, $1.10, up $0.15)

Entry Price: $0.85 (12/21/2016)
Exit Target: $1.70
Return: 29%
Stop Target: None

Action: Fresh resistance is at $9.25-$9.50 following yesterday’s run to a 52-week high of $9.25. I have been talking about a run past double-digits and piggy-backing this trade on a close above $9. Rising support is at $9-$8.75.

Special Notice: If shares hold $9 following this morning’s open, I could issue another new trade in ARRY.