MomentumOptions.com Pre-Market Update for 1/6/2017
Tech Shines on Slight Pullback
The market finished mixed on Thursday with Tech showing a little strength while the small-caps came in as the weakest link. Volatility continued to approach key levels of support and is still suggesting another possible breakout to record highs. Today’s unemployment report could help or hurt the bulls case to get the shortened weekly win.
The Dow declined 42 points, or 0.2%, to close at 19,899. The blue-chips were choppy on the open but managed to split resistance at 19,900-20,000 after peaking at 19,948. The backtest to 19,811 held support at 19,800-19,725 with risk to 19,600-19,500 on a close below the latter.
The S&P 500 slipped nearly 2 points, or 0.6%, to end at 2,269. The index made a run to 2,271 shortly after the opening bell but fell shy of lower resistance at 2,275-2,300. Upper support at 2,260-2,250 held on the backtest to the former. There is risk to 2,240-2,235 on a move below the latter.
The Nasdaq added 11 points, or 0.2%, to finish a a shade under 5,488. Tech traded to a high of 5,495 during the first half of action with lower resistance is at 5,500-5,525 holding. The intraday pullback to 5,464 held support at 5,450-5,425 with a close below 5,400 our signal to go short.
The Russell 2000 tumbled 16 points, or 1.2%, to settle slightly below 1,372. The small-caps traded in negative territory throughout the session with the low reaching 1,366. Fresh support at 1,375-1,370 was breeched and the close in the middle was neutral. Backup help is at 1,360. Resistance is at 1,375-1,400.
The S&P 500 Volatility Index ($VIX, 11.67, down 0.18) tested a high of 12.09 midday with lowered resistance at 12.50-13.50 easily holding. The low of 11.40 held support 11.50-11 with a close below the latter getting 10 and possibly single-digits in play.
A continued trading range could be in play until early next week if this morning’s jobs report disappoints. I’m still hoping to add another new trade to the portfolio so stay patient as we wait for clearer signs to emerge.
From desk to press, futures look like this: Dow (-6); S&P 500 (-1); Nasdaq 100 (-1).
Momentum Options Play List
Closed Momentum Options Trades for 2017: 1-0 (100%). 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, $19.34, down $0.13)
TSEM February 20 calls (TSEM170217C00020000, $0.55, down $0.05)
Entry Price: $0.55 (1/3/2017)
Exit Target: $1.10 (Limit Order on 1/3)
Stop Target: None
Action: Thursday’s low reached $19.17. Support is at $19.25-$19. Resistance is at $19.50-$19.75.
Sony (SNE, $28.72, up $0.14)
February 27 puts (SNE170217P00027000, $0.60, down $0.05)
Entry Price: $0.65 (12/23/2016)
Exit Target: $1.30
Stop Target: None
Action: Yesterday’s peak reached $28.79. Resistance is at $28.75-$29. Support is at $28.25-$28.
Array Biopharma (ARRY, $8.82, down $0.35)
ARRY March 10 calls (ARRY170317C00010000, $0.95, down $0.15)
Entry Price: $0.85 (12/21/2016)
Exit Target: $1.70
Stop Target: None
Action: Resistance is at $9-$9.25. Support is at $8.75-$8.50.