Pre-Market Update for 1/10/2017

Tech Up Five-Straight

8:00am (EST)

The bulls were counting on Tech to turn the market’s overall weakness on Monday’s open but the bears held steady to get the win. The Financial stocks got another sector upgrade from Wall Street but also struggled attaining higher ground. The pullback and continued sideways to mixed action could carry over until week’s end and when a likely clearer trend might emerge.

The Dow gave back 76 points, or 0.4%, to finish at 19,887. The blue-chips traded in negative territory throughout the session with the closing bell representing the low. Support at 19,800-19,725 easily held but a close below the latter would be a bearish development. Resistance remains at 19,900-20,000.

The S&P 500 slipped 8 points, or 0.4%, to settle just below 2,269. The index also bleed red from the start of trading while also finishing at its session low of 2,268.90. Upper support at 2,260-2,250 wasn’t a worrisome but a move below the latter would be. Resistance is holding at 2,275-2,300.

The Nasdaq added over 10 points, or 0.2%, to close at 5,531. Tech held positive territory for much of the day aside from the 4-point pullback to 5,517 shortly after the open. Short-term support at 5,525-5,500 held tight with risk to 5,450 on a move below the latter. The run to 5,541 set another intraday all-time high and keeps my fresh fluff targets of 5,575-5,625 in play.

The Russell 2000 tumbled 9 points, or 0.7%, to end at 1,357. The small-caps struggled from the open while bottoming at 1,356 during the first half of action. Support at 1,360-1,350 was split and I talked specifically about the importance of the latter part of this range holding throughout this week. If not, I have a possible put option trade waiting in the wings. The index nearly made a recovery into positive territory by midday but fell shy by less than a fifth-point after stalling at 1,367. Hard resistance remains at 1,375-1,400.

The S&P 500 Volatility Index ($VIX, 11.56, up 0.24) stayed elevated but peaked at 12.08 within the first 15 minutes of trading. This was a bullish sign along with resistance at 12.50-13.50 holding for the fourth-straight session. The close back above 11.50 was a bummer but longer-term support at 10 and single-digits could still be in the mix.

One of our current trades, ARRY had a strong Monday and shares were up another 15% to $10.80 in after-hours trading. Our current position is up 41% and I’m hoping our bullish call option trade can return triple-digits by the end of today’s close.

From desk to press, futures look like this: Dow (xx); S&P 500 (xx); Nasdaq 100 (xx); Russell (xx).
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.
Green Dot (GDOT, $24.68, down $0.39)

GDOT March 25 calls (GDOT170317C00025000, $1.25, down $0.10)

Entry Price: $1.30 (1/6/2017)
Exit Target: $2.60
Return: -4%
Stop Target: None

Action: Yesterday’s low tapped $24.66. Support is at $24.50-$24.25. Resistance at $24.75-$25.
Sprint (S, $8.70, up $0.01)

S February 9 calls (S170317C00009000, $0.45, down $0.05)

Entry Price: $0.54 (1/6/2017)
Exit Target: $1.10
Return: -17%
Stop Target: None

Action: Shares tested $8.59 before rebounding to push a high of $8.75. Resistance is at $8.75-$9. Support is at $8.50-$8.25.
Tower Semiconductor (TSEM, $19.65, up $0.27)

TSEM February 20 calls (TSEM170217C00020000, $0.65, up $0.05)

Entry Price: $0.55 (1/3/2017)
Exit Target: $1.10 (Limit Order on 1/3)
Return: 18%
Stop Target: None

Action: Monday’s high reached $19.70. Resistance is at $19.50-$19.75. The 52-week high is at $20.04. Rising support is at $19.50-$19.25.
Sony (SNE, $28.82, down $0.14)

February 27 puts (SNE170217P00027000, $0.45, flat)

Entry Price: $0.65 (12/23/2016)
Exit Target: $1.30
Return: -31%
Stop Target: None

Action: The close back below $29 and low of $28.74 were good signs yesterday. Support is at $28.50-$28.25. Resistance is at $29-$29.25.
Array Biopharma (ARRY, $9.40, up $0.46)

ARRY March 10 calls (ARRY170317C00010000, $1.20, up $0.20)

Entry Price: $0.85 (12/21/2016)
Exit Target: $1.70
Return: 41%
Stop Target: None

Action: Shares tested a high of $9.49 on Monday and were surging past $10 in after-hours trading! I will update the parameters of the trade during the Mid-Market update once the options have opened and traded.

Fresh resistance is at $11-$12. Support is at $10 if the gains hold into this morning’s opening bell.

I mentioned I have a $12-$14 Price Target for AARY by mid-March.