Pre-Market Update for 2/10/2017

VIX Becomes Hot Topic

8:00am (EST)

With volatility remaining near historic lows, it has been hard to believe record highs are still in play…if you are listening to the talking heads and slick-talking pros. If you have been reading me, then you know I have stated the low VIX would drive them bonkers. “Ridiculously low” and “the VIX is broken” were some of the dumbest comments I heard yesterday, and it gives me a chuckle knowing how overpaid most analysts really are and how clueless they have become.

The Dow climbed 118 points, or 0.6%, to close at 20,172. The blue-chips held positive territory throughout Thursday while reaching an all-time intraday high of 20,206. Upper resistance at 20,125-20,200 was cleared to open the door for a possible push towards 20,350-20,400 over the near-term. Rising support is at 20,000-19,900.

The S&P 500 soared 13 points, or 0.6%, to end at 2,307. The index made a steady run to 2,311 ahead of the closing bell to set a fresh record high while clearing lower resistance at 2,300-2,325. Support has moved up to 2,290-2,285.

The Nasdaq advanced 32 points, or 0.6%, to finish at 5,715. Tech tested its third-straight lifetime high of 5,722 intraday while clearing upper resistance at 5,675-5,700. The close above the latter gets 5,750-5,800 in play. Support is trying to build a base at 5,675-5,650 with a move below the latter possibly signaling a short-term top.

The Russell 2000 surged 19 points, or 1.5%, to settle at 1,378. The small-caps lead the breakout to higher highs following their run to 1,379 on Thursday. The move and close above upper resistance at 1,370-1,375 was a bullish sign. Fresh hurdles are at 1,385-1,390 with the all-time peak north of 1,392. Support has moved up to 1,370-1,365.

The S&P 500 Volatility Index ($VIX, 10.88, down 0.57) tested a high of 11.53 on the open with lowered resistance at 11.50-12.50 holding. The intraday low of 10.74 split fresh support at 11-10.50.

I have adjusted one and set a Stop Limit for the other on our VIAV trades. I could have new trades ahead of today’s Mid-Market Update so stay close to your email inboxes.

From desk to press, futures look like this: Dow (+33); S&P 500 (+3); Nasdaq 100 (+9).


Momentum Options Play List

Closed Momentum Options Trades for 2017: 9-1 (90%). 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, $10.29, up $0.25)

VIAV March 10 calls (VIAV170317C00010000, $0.65, up $0.20)

Entry Price: $0.40 (2/8/2017)
Exit Target: $0.80
Return: 62%
Stop Target: 48 cents (Stop Limit)

VIAV March 9 calls (VIAV170317C00009000, $1.40, up $0.35)

Entry Price: $0.50 (1/25/2017)
Exit Target: $1.50, raise to $2.00
Return: 180%
Stop Target: 90 cents, raise to $1.20 (Stop Limit)

Action: Set an initial Stop Limit at 48 cents on the March 10 calls to protect profits.

Raise the Exit Target from $1.50 to $2.00 on the March 9 calls. Raise the Stop Limit from 90 cents to $1.20. This will guarantee a return of at least 140%.

Shares traded to another 52-week peak of $10.44 yesterday. Fresh resistance is at $10.50-$10.75. Rising support is at $10-$9.75.


Boston Scientific (BSX, $25.34, up $0.10)

BSX March 25 calls (BSX170317C00025000, $0.80, up $0.05)

Entry Price: $0.70 (2/7/2017)
Exit Target: $1.40
Return: 14%
Stop Target: None

Action: Fresh resistance is at $25.50-$25.75 following yesterday’s 52-week high of $25.45. Support is at $25-$24.75.


Tower Semiconductor (TSEM, $22.09, up $0.55)

TSEM March 23 calls (TSEM170317C00023000, $0.60, up $0.10)

Entry Price: $0.45 (2/7/2017)
Exit Target: $0.90
Return: 33%
Stop Target: None

Action: This is our third trade on TSEM since December 21st and when shares were at $19.65. The first two trades made profits of 100% and 46%, respectively. I believe shares can easily make a run towards $24-$25 on continued momentum. This would easily get us a triple-digit return if these price targets are triggered by mid-March.

Yesterday’s run to $22.20 was another multi-year high. Resistance and fresh fluff is at $22.25-$22.50. Support is at $21.75-$21.50.


TherapeuticsMD (TXMD, $5.84, down $0.09)

TXMD June 7.50 calls (TXMD170616C00007500, $0.60, flat)

Entry Price: $0.75 (1/18/2017)
Exit Target: $1.50
Return: -20%
Stop Target: None

Action: Shares kisses a high of $6.07 on Thursday before finishing in the red. Resistance is at $6. Support is at $5.75-$5.50.


Sony (SNE, $31.80, 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)
Return: -85%
Stop Target: None

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