Pre-Market Update for 1/18/2017

Bears Push Near-Term Support

8:00pm (EST)

The bears haven’t made much headlines this year as the bulls have pushed the top of the trading ranges and fresh all-time highs. Tuesday’s action made headlines as more of the suit-and-ties are once again saying the market has peaked. The Financials got whacked and that helped support their thesis but volatility stayed cooled under pressure while holding resistance.

The Dow fell 59 points, or 0.3%, to settle at 19,826. The blue-chips traded underwater throughout the session while testing a low of 19,775. Support at 19,800-19,725 was breeched with a move below the latter getting 19,600-19,550 in play. Resistance remains at 19,900-20,000.

The S&P 500 lost 6 points, or 0.3%, to close at 2,267. The index stayed weak throughout Tuesday after trading down to 2,262 ahead of the closing bell. Support is at 2,260-2,250 with a close below 2,240 being a bearish development. Resistance and the top of the trading range remains at 2,275-2,300.

The Nasdaq dropped 35 points, or 0.6%, to end at 5,538. Tech tumbled down to 5,527 an hour ahead of the close with upper support at 5,525-5,500 holding. I mentioned a close below 5,500 might be a good opportunity for a quick backtest to 5,450-5,400 and the 50-day moving average. Resistance has moved down to 5,550- 5,575. Side Note: The QQQ’s closed at $122.79 and a move below $122.50-$122.25 could lead to a continued backtest to $120-$119.50.

The Russell 2000 gave back 19 points, or 1.4%, to finish at 1,352. The small-caps stumbled to a low of 1,351 with lower support at 1,360-1,350 holding by a point. A close below 1,340 would be another bearish development. Lowered resistance is now at 1,365-1,370.

The S&P 500 Volatility Index ($VIX, 11.87, up 0.64) gained 6% after testing a high of 12.75. Lower resistance at 12.50-13.50 was tickled but held. Support is at 11.50-11.

If you ignore yesterday’s noise, we have the same setup we have been since early to mid-December with a tight trading range intact. One bearish note for the blue-chips was the action in Goldman Sachs (GS, $235.74, down $8.56) as shares fell 3.5% for the session.

I could have a New Trade shortly after the open, or during today’s Mid-Market update so stay locked-and-loaded.

From desk to press, futures look like this: Dow (+19); S&P 500 (+3); Nasdaq 100 (+7); Russell (+2).


Momentum Options Play List

Closed Momentum Options Trades for 2017: 3-0 (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.


Transocean (RIG, $15.59, up $0.11)

RIG March 17 calls (RIG170317C00017000, $0.65, up $0.02)

Entry Price: $0.66 (1/13/2017)
Exit Target: $1.35
Return: -2%
Stop Target: None

Action: Shares held positive territory throughout Tuesday while testing a high of $15.74. Near-term resistance is at $15.75-$16. Support is at $15.25-$15.


Tower Semiconductor (TSEM, $20.11, down $0.28)

TSEM February 21 calls (TSEM170217C00021000, $0.55, down $0.15)

Entry Price: $0.65 (1/11/2017)
Exit Target: $1.30
Return: -15%
Stop Target: None

Action: Yesterday’s low tapped $20.03. Support is at $20-$19.75. Resistance is at $20.75-$21.


Green Dot (GDOT, $25.23, down $0.05)

GDOT March 25 calls (GDOT170317C00025000, $1.45, flat)

Entry Price: $1.30 (1/6/2017)
Exit Target: $2.60
Return: 12%
Stop Target: $1

Action: Resistance is at $25.50-$25.75. Support is at $25-$24.75. Yesterday’s bottom reached $25.08.


Sprint (S, $8.65, up $0.04)

S February 9 calls (S170317C00009000, $0.40, up $0.01)

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

Action: Shares traded up to $8.96 on Tuesday. Resistance is at $8.75-$9. Support is at $8.50-$8.25.


Sony (SNE, $30.86, down $0.16)

February 27 puts (SNE170217P00027000, $0.15, flat)

Entry Price: $0.65 (12/23/2016)
Exit Target: $1.30
Return: -77%
Stop Target: 10 cents (Limit Order on half)

Action: SNE kissed $30.83 yesterday. Support is at $31-$30.50. Resistance is at $31.25-$31.50.