MomentumOptions.com Pre-Market Update for 2/2/2017
Bears Keep Tight Leash on Bulls/ Profit Alert (IWM)
The market got off to a good start on Wednesday but feel prey to Fed jitters and petty politics. Half the zombies decided to keep interest rates unchanged, while the other half fought over the President’s rapid fire policies. It is clear the Republicans want to work, but the Democrats are still stinging from a shocking loss and appear intent on holding up the system.
The Dow added 26 points, or 0.1%, to finish at 19,890. The blue-chips tested a high of 19,967 shortly after the open with lower resistance at 20,000-20,150 holding. The backtest to 19,845 ahead of Wall Street’s lunch break held support at 19,900-19,800. A move below the latter gets 19,700-19,600 and the 50-day moving average back in focus.
The S&P 500 advanced a point, or 0.03%, to settle at 2,279. The index raced to a high of 2,289 out of the gate with resistance at 2,285-2,300 getting pushed. Support at 2,275-2,270 was split but held following the intraday dip to 2,272. Backup help is at 2,250-2,245 and the 50-day moving average.
The Nasdaq jumped 27 points, or 0.5%, to close at 5,642. Tech traded up to 5,662 and came within 7 points of setting a fresh all-time peak while holding positive territory throughout session. Resistance at 5,650-5,675 was defended with a move above the latter a bullish development. Support remains at 5,625-5,575.
The Russell 2000 declined a half-point, or 0.1%, to end at 1,361. The small-caps made a push to 1,374 during the opening minutes with resistance at 1,365-1,370 getting stretched. Rising support is at 1,355-1,350 following the midday backtest to 1,357 with backup at 1,345-1,340.
The S&P 500 Volatility Index ($VIX, 11.81, down 0.18) traded in mostly negative territory aside from the run to 12.05 intraday. Resistance is at 12.50-13.50. The low of 9.97 cracked multiple layers of support at 11.50-11 and 10.50-10.
I have updated our current trades along with a Profit Alert for IWM. I could have New Trades at some point this morning so stay close to your email inboxes.
From desk to press, futures look like this: Dow (-74); S&P 500 (-9); Nasdaq 100 (-26).
Momentum Options Play List
Closed Momentum Options Trades for 2017: 7-1 (88%). All trades are dated and time stamped for verification. New subscribers can look at the past history to see how the trades have played out or to research our Track Records.
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.
iShares Russell 2000 (IWM, $135.15, down $0.08)
IWM March 138 calls (IWM170317C00138000, $1.80, down 0.13)
Entry Price: $1.50 (1/31/2017)
Exit Target: $3
Stop Target: $1.70 (Stop Limit)
Action: The Stop Limit at $1.70 tripped on yesterday’s weakness into the closing bell. The calls kissed $2.54 shortly after the open before fading to a low of $1.65. I could come back to the small-caps if the Russell 2000 can clear 1,375. A move below 1,340 might provide a shorting opportunity.
Viavi Solutions (VIAV, $9.29, up $0.34)
VIAV March 9 calls (VIAV170317C00009000, $0.55, up $0.10)
Entry Price: $0.50 (1/25/2017)
Exit Target: $1.00
Stop Target: None
Action: Wednesday’s high tapped $9.37 with the recent 52-week peak at $9.40. Fresh resistance is at $9.50 with a close above the latter likely leading to a run past $10. Support has moved up $9-$8.75.
TherapeuticsMD (TXMD, $5.82, up $0.01)
TXMD June 7.50 calls (TXMD170616C00007500, $0.65, flat)
Entry Price: $0.75 (1/18/2017)
Exit Target: $1.50
Stop Target: None
Action: Yesterday’s high reached $5.87. Resistance is at $6. Support has moved up to $5.50-$5.25.
Sony (SNE, $30.24, down $0.03)
February 27 puts (SNE170217P00027000, $0.10, flat)
Entry Price: $0.65 (12/23/2016)
Exit Target: $1.30 (closed half at 10 cents on 1/23/17)
Stop Target: None
Action: Support is at $29.75-$29.50. Resistance is at $30.50.