Pre-Market Update for 1/20/2017

Fresh Lows in Play

8:00am (EST)

The bears are starting to look dangerous as they were able to push fresh 2017 lows and early December levels. The bottom of the trading ranges are still holding but another lower close ahead of the weekend could be a cause for concern. Inauguration Day has a history of more negative closes than positive, and the talking heads that have pegged this the “Trump rally” are now calling for a “Trump Dump”. I don’t like to label rallies or selloffs, as I rely more on the technical setup, but the bulls need to show some strength today. If not, today and next week could get rocky.

The Dow dropped 72 points, or 0.4%, to end at 19,732. The blue-chips opened slightly higher while making a run to 19,824. Resistance at 19,900-20,000 easily held with the index giving up its gains a half-hour into trading. The late day low tapped 19,677 with lower support at 19,800-19,725 holding. The breech below the latter gets backup support at 19,600-19,550 in play.

The S&P 500 slipped 8 points, or 0.4%, to finish at 2,263. The index tested a high of 2,274 shortly after the open but failed lower resistance at 2,275-2,300 holding by a point. Support at 2,260-2,250 held following the backtest to 2,258. A move below the opens up risk to 2,240-2,235.

The Nasdaq fell 15 points, or 0.3%, to settle at 5,540. Tech made headway to 5,571 at the start of trading with lower resistance at 5,575-5,600 standing strong. Upper support at 5,525-5,500 held with the low checking in at 5,528. This was a slightly bullish signal but I have warned a close below 5,500 would be a bearish development.

The Russell 2000 rumbled 12 points, or 0.9%, to close at 1,345. The small-caps managed a 2-point run to 1,360 on the open but failed resistance at 1,365-1,370. The steady slid to 1,342 intraday held lower support at 1,350-1,340. The bearish action was the most disruptive to the market and a close below the latter and the 50-day moving average could lead to additional weakness to 1,325-1,320.

The S&P 500 Volatility Index ($VIX, 12.78, up 0.30) traded down to 12.17 during the morning with support at 11.50-11 holding. The high reached 13.28 and breeched the 50-day moving average before holding into the closing bell. The close above lower resistance at 12.50-13.50 warrants caution with a move above the latter likely leading to 14.50-15, quickly.

From desk to press, futures look like this: Dow (-14); S&P 500 (+2); Nasdaq 100 (+9).


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, $5.62, down $0.23)

TXMD June 7.50 calls (TXMD170616C00007500, $0.65, down $0.13)

Entry Price: $0.75 (1/18/2017)
Exit Target: $1.50
Return: -13%
Stop Target: None

Action: Support is at $5.75-$5.50. Yesterday’s low tapped $5.57. Near-term resistance is at $6-$6.25.


Transocean (RIG, $15.09, down $0.21)

RIG March 17 calls (RIG170317C00017000, $0.40, down $0.10)

Entry Price: $0.66 (1/13/2017)
Exit Target: $1.35
Return: -39%
Stop Target: None

Action: Thursday’s low reached $15.01. Support is at $15.25-$15. Near-term resistance is at $15.75-$16.


Tower Semiconductor (TSEM, $20.12, down $0.11)

TSEM February 21 calls (TSEM170217C00021000, $0.60, flat)

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

Action: Resistance is at $20.50-$20.75. Support is at $20-$19.75. Yesterday’s low was at $19.92.


Green Dot (GDOT, $25.29, down $0.16)

GDOT March 25 calls (GDOT170317C00025000, $1.55, flat)

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

Action: Support is at $25.25-$25. Resistance is at $25.50-$25.75.


Sprint (S, $8.97, up $0.24)

S February 9 calls (S170317C00009000, $0.54, up $0.13)

Entry Price: $0.54 (1/6/2017)
Exit Target: $1.10
Return: 0%
Stop Target: None

Action: Shares traded to a 52-week high of $9.10 on Thursday. Fresh resistance is at $9-$9.25. Support has moved up to $8.75-$8.50.


Sony (SNE, $30.40, down $0.31)

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: Shares traded down to $30.34 yesterday. Support is at $30.50-$30.25. Resistance is at $30.75-$31.