Pre-Market Update for 1/12/2017

Tech Stays Strong

8:00am (EST)

The bulls continued their march towards upper resistance and fresh all-time highs following another choppy session. The buildup into Friday’s Financial earnings parade could continue with a breakout possible ahead of the news but another consolidated range is likely.

The Dow jumped 98 points, or 0.5%, to close at 19,954. The blue-chips traded in positive territory aside from the midday dip to 19,833. The high reached 19,973 shortly after the open with resistance at 19,900-20,000 holding. Support at 19,800-19,725 continues to be solid.

The S&P 500 spiked 6 points, or 0.3%, to end at 2,275. The index tested upper support at 2,260-2,250 intraday that represented the weekly low. The rebound and close at the session high held lower resistance at 2,275-2,300. Last Friday’s lifetime high reached 2,282.

The Nasdaq advanced 11 points, or 0.2%, to finish at 5,563. Tech traded to a high of 5,564 with resistance and additional fluff targets at 5,575-5,625. Upper near-term support at 5,525-5,500 held by a point on the midday trip to 5,524.

The Russell 2000 gained 2 points, or 2%, to settle at 1,373. The small-caps traded in a 10-point range of 1,365-1,375. Resistance is at 1,375-1,400. Support remains at 1,360-1,350.

The S&P 500 Volatility Index ($VIX, 11.26, down 0.23) kissed a high of 12.23 during Wednesday’s action with resistance at 12.50-13.50 holding for the six-straight session. A close above the latter will be a sure signal to add VIX options. The intraday low of 11.21 split support at 11.50-11 with 10 and single-digits in play on a close below the latter.

I have updated the parameters of our latest TSEM trade after we locked-in a triple-digit profits on our original call options. I could also have a New Trade ready that I’m still researching but could be ready by the Mid-Market update.

From desk to press, futures look like this: Dow (-46); S&P 500 (-6); Nasdaq 100 (-13); Russell (-5).


Momentum Options Play List

Closed Momentum Options Trades for 2017: 2-0 (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 8am and 12pm–2pm (EST) updates. Also, I will usually give you a heads-up if I think I’m going to send an Trade Alerts outside of these time frames.


Tower Semiconductor (TSEM, $20.37, up $0.28)

TSEM February 21 calls (TSEM170217C00021000, $0.70, up $0.27)

Entry Price: $0.65 (1/11/2017)
Exit Target: $1.30
Return: 8%
Stop Target: None

TSEM February 20 calls (TSEM170217C00020000, $1.20, up $0.35)

Entry Price: $0.55 (1/3/2017)
Exit Target: $1.10, raise to $2 (closed 1/3 @ $1.10)
Return: 112%
Stop Target: $1 (Stop Limit)

Action: Set an Exit Target at $1.30 on the February 21’s. There is no Stop Limit.

Raise the Exit Target to $2 on the February 20’s. Set a Stop Limit at $1 on the other 2/3rd’s of the trade.

Shares traded to a fresh 52-week high of $20.41 on Wednesday. I mentioned call buying was heavy in the February 21 & 22 strikes and why I piggy-backed the trade. I also wanted to lock-in profits on our first triple-digit gain for 2017.

Fresh resistance is at $20.50-$21. Support is at $20-$19.75.


Green Dot (GDOT, $24.88, down $0.09)

GDOT March 25 calls (GDOT170317C00025000, $1.35, flat)

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

Action: Yesterday’s low tapped $24.62. Support is at $24.50-$24.25. Resistance is at $25-25.50.


Sprint (S, $8.63, down $0.13)

S February 9 calls (S170317C00009000, $0.40, down $0.05)

Entry Price: $0.54 (1/6/2017)
Exit Target: $1.10
Return: -26%
Stop Target: None

Action: Support is at $8.50-$8.25. Wednesday’s low reached $8.53. Resistance is at $8.75-$9.


Sony (SNE, $30.44, up $0.91)

February 27 puts (SNE170217P00027000, $0.20, down $0.20)

Entry Price: $0.65 (12/23/2016)
Exit Target: $1.30
Return: -69%
Stop Target: None

Action: An “island” breakout occurred yesterday with shares reaching a peak of $30.46. Resistance at $30.50-$30.75. Support is at $30-$29.50. I still like this trade as put insurance through mid-February but I would like to see a close back below $30 ahead of the weekend.