Mid-Market Update for 2/2/2017

Facebook (FB) Stalls Despite Impressive Numbers

1:30pm (EST)

Futures were deep in the red ahead of this morning’s opening bell and signaled another backtest to near-term support. The bulls defended the bottom of the trading ranges and have again rebounded off the lows. The action in the small-caps, along with the VIX, continue to be our most important gauges for market direction into the weekend and both are still showing bullish signs.

Shares of Facebook (FB) set a fresh 52-week peak of $134.73 following the company’s earnings announcement. The company reported a profit of $1.41 a share on revenue of $8.81 billion. Wall Street was looking for $1.31 a share on revenue of $8.5 billion.

The stock came into the year a nickel above $115 and today’s 52-week peak clears the previous high north of $133 set last October 2016. The company continues to show strong growth as daily active users were up 18% to 1.23 billion. Monthly active users were at 1.86 billion with mobile users at 1.74 billion as of the end of December.

Although I was more bullish than bearish in Facebook delivering a solid quarter, the options were too expensive to give a bullish strategy consideration. Shares have pulled back off their high and are in negative territory as I head to press. If you own the stock, I would continue to hold while possibly writing call options against the position.

Today’s action could remain choppy into the closing bell as the suit-and-ties await tomorrow’s jobs report. The Dow is dipping 14 points to 19,876 while the S&P 500 is slipping a point to 2,278. The Nasdaq is down 10 points to 5,632 and the Russell 2000 is declining 2 points to 1,358.

I have updated our current trades and I’m working on a couple of new trades I hope to add ahead of the closing bell. Stay locked-and-loaded until 3pm (EST) in case I take action.


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.


Viavi Solutions (VIAV, $9.32, up $0.03)

VIAV March 9 calls (VIAV170317C00009000, $0.55, flat)

Entry Price: $0.50 (1/25/2017)
Exit Target: $1.00
Return: 10%
Stop Target: None

Action: Resistance is at $9.50-$10. Support is at $9-$8.75.


TherapeuticsMD (TXMD, $5.88, up $0.06)

TXMD June 7.50 calls (TXMD170616C00007500, $0.65, flat)

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

Action: Resistance is at $6. Support has moved up to $5.50-$5.25.


Sony (SNE, $31.91, up $1.67)

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)
Return: -85%
Stop Target: None

Action: Resistance is at $32. Support is at $31.50-$31.