Pre-Market Update for 1/19/2017

Mixed Session as Lower Dow Low Holds

8:00am (EST)

The market traded on both sides of the ledger on Wednesday as the trading range continues. Although this week’s signs have been mostly bearish, the bulls are keeping a strong hold on the bottom of the ranges. I’ve mentioned if they do crack, Tech could make a backtest towards its 50-day moving average. However, I often mention the action can get stretched so it remains important we keep our emotions in check until a clearer trend develops.

The Dow fell 22 points, or 0.1%, to close at 19,804. The blue-chips tested a low of 19,739 with lower support at 19,800-19,725 holding. The rebound to 19,828 shortly afterwards and close above upper support was slightly bullish. The rest of the session was a wash with resistance at 19,900-20,000 still a stickler.

The S&P 500 added 4 points, or 0.2%, to end at 2,271. The index dropped to a low of 2,263 on e opening dust with upper support at 2,260-2,250 holding. This was a bullish sign along with the run to 2,272 into the closing bell. Resistance is 2,275-2,300 with a move and close into this zone getting the fresh all-time highs in mix.

The Nasdaq climbed 17 points, or 0.3%, to finish at 5,555. Tech traded in positively territory for much of the session aside from the morning dip to 5,534. Upper support at 5,525-5,500 easily held with the index going out at its high. Resistance is at 5,575-5,600 with the lifetime high at 5,584.

The Russell 2000 gained 6 points, or 0.5%, to settle at 1,358. The small-caps also held green for much of the day with a 2-point slide on the open holding support at 1,350-1,340. The index also closed just off its high but fell shy of near-term resistance at 1,365-1,370. A recovery of the latter would be bullish for a possible run to 1,385-1,400 and fresh record highs.

The S&P 500 Volatility Index ($VIX, 12.48, up 0.61) stayed slightly elevated for the second-straight session with the high tapping 12.81. Resistance at 12.50-13.50 held with a close above the latter a warning sign. Support is at 11.50-11. Wednesday’s low reached 11.69.

There were signs yesterday’s action might have been a temporary “double bottom” but I warned of stretch in my opening comments. In any event, if lower lows do come into play, I have a bearish trade or two to take advantage of continued market weakness, or a higher VIX. I have set the parameters of our latest trade, TXMD, so please take note.

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


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.


TherapeuticsMD (TXMD, $5.85, up $0.11)

TXMD June 7.50 calls (TXMD170616C00007500, $0.78, up $0.08)

Entry Price: $0.75 (1/18/2017)
Exit Target: $1.50
Return: 4%
Stop Target: None

Action: Set an Exit Target at $1.50. There is no Stop Target.

Near-term resistance is at $6-$6.25 and the 50-day moving average that is starting to develop a rising uptrend. Support is at $5.75-$5.50. A close below the latter would be a bearish development. I will have a more detailed report in the coming days.

Transocean (RIG, $15.30, down $0.29)

RIG March 17 calls (RIG170317C00017000, $0.50, down $0.15)

Entry Price: $0.66 (1/13/2017)
Exit Target: $1.35
Return: -24%
Stop Target: None

Action: Yesterday’s low reached $15.18. Support is at $15.25-$15. Near-term resistance is at $15.75-$16.


Tower Semiconductor (TSEM, $20.23, up $0.12)

TSEM February 21 calls (TSEM170217C00021000, $0.60, up $0.05)

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

Action: Resistance is at $20.50-$20.75. Wednesday’s peak reached $20.35. Support is at $20-$19.75.


Green Dot (GDOT, $25.45, up $0.22)

GDOT March 25 calls (GDOT170317C00025000, $1.55, up $0.10)

Entry Price: $1.30 (1/6/2017)
Exit Target: $2.60
Return: 19%
Stop Target: $1

Action: Shares traded to a high of $25.49 yesterday. Resistance is at $25.50-$25.75. The 52-week peak is at $25.79. Support is trying to move up to $25.25-$25.


Sprint (S, $8.73, up $0.08)

S February 9 calls (S170317C00009000, $0.40, flat)

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

Action: Resistance is at $8.75-$9. Support is at $8.50-$8.25.


Sony (SNE, $30.71, down $0.14)

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: Support is at $30.50-$30.25. Resistance is at $31.25-$31.50. Wednesday’s low reached $30.60 and I’d like to see a close below $30 this week.