Pre-Market Update for 2/21/2017

Nasdaq Closes at Record High

8:00am (EST)

For the traders that took off early on Friday, they were rather surprised to see a higher close following a final hour push past the morning open. The rebound off the intraday lows wrapped up another record week to higher highs and my near-term fluff targets for the major indexes. There was some chatter of Nasdaq 6,000 by the talking heads, and while that makes me a little nervous, the near-term momentum, is still favoring the bulls.

The Dow advanced 4 points, or 0.02%, to finish at 20,624 on Friday. The blue-chips traded in negative territory throughout much of the session with the low reaching 20,532. Near-term support at 20,400-20,350 held before the last minute rally to session highs. Resistance and bluer-sky territory remain at 20,800-21,000. Last week’s all-time peak reached 20,639.87.

The S&P 500 also climbed 4 points, or 0.2%, to settle at 2,351. The index tested an intraday low of 2,339 but it was a higher low than Thursday’s trip to 2,338 and all of last week. Rising support remains at at 2,325-2,300. I have talked about additional fluff and resistance at 2,375-2,400 on continued closes above the 2,350 level and where a possible short-term top might come into play.

The Nasdaq gained 23 points, or 0.4%, to close at 5,838. Tech retreated to 5,800 shortly after Friday’s open with upper support at 5,800-5,750 holding. I mentioned the index had a good shot at triggering 5,900-6,000 by March, or April, and the latter was echoed by one of my few favorite talking heads. Last week’s chart shows I was two years ahead of the Nasdaq 6,000 call and I’m still looking for a test towards this level in the coming weeks. Friday’s intraday record high reached 5838.58 on the close.

The Russell 2000 added three-quarters of a point, or 0.1%, to end at 1,399.86. The small-caps kissed 1,392 a couple of hours into trading with rising support at 1,390-1,385 holding. I mentioned this would be a key area to watch ahead of the three-day weekend and the bulls easily held fort. The index failed lower resistance at 1,400-1,425 but also went out at its session high. The lifetime peak reached 1,405 last week.

The S&P 500 Volatility Index ($VIX, 11.49, down 0.27) made a run to 12.26 on Friday’s open with lower resistance at 12.50-13.50 holding. I talked about the bulls needing to get below and holding the 11.50 level ahead of this week to keep near-term support at 11-10.50 in play. Continued closes below the latter keeps 10 and single-digits in play. The February 1st 52-week low is at 9.97.

I have been working on my annual February predictions for the major indexes and wanted to wait until this week was complete before updating the 10 and 15-year charts. There are also several other factors that I’m weighing on as I want to highlight major areas of support on potential pullbacks that will come at some point this year. For new subscribers, please review last Monday morning’s (2/13) chart work and market commentary to get a quick snapshot of my thoughts on Nasdaq 6,000 along with the rest of the major indexes.

I could have a New Trade shortly after this morning’s open as I also spent the weekend stocking up my Watch List. There are a number of bullish opportunities I see, along with a few bearish trades, that look good for triple-digit profits. I want to see how some of the options open and do some quick math before making official recommendations so stay locked-and-loaded.

From desk to press, futures look like this: Dow (+34); S&P 500 (+4); Nasdaq 100 (+11); Russell (+2).


Momentum Options Play List

Closed Momentum Options Trades for 2017: 10-2 (83%). 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.


Jabil Circuit (JBL, $25.91, down $0.06)

JBL March 26 calls (JBL170317C00026000, $0.85, down $0.10)

Entry Price: $0.65 (2/13/2017)
Exit Target: $1.30
Return: 31%
Stop Target: 70 cents (Stop Limit)

Action: Shares traded to a low of $25.67 on Friday with the calls testing a low of 75 cents. Resistance is at $26-$26.25 and the 52-week high at $26.02. Near-term support is at $25.75-$25.50 with a move below the latter likely stopping us out of the trade.


Flex (FLEX, $16.44, down $0.03)

FLEX April 17 calls (FLEX170421C00017000, $0.32, flat)

Entry Price: $0.35 (2/15/2017)
Exit Target: $0.70
Return: -9%
Stop Target: None

FLEX March 16 calls (FLEX170317C00016000, $0.60, down $0.05)

Entry Price: $0.40 (2/10/2017)
Exit Target: $1.10
Return: 50%
Stop Target: 50 cents (Stop Limit)

Action: Support is at $16.25-$16. Friday’s low tapped $16.28. Resistance is at $16.75-$17. The recent 52-week high is at $16.68.


Viavi Solutions (VIAV, $10.71, up $0.01)

VIAV March 10 calls (VIAV170317C00010000, $0.85, flat)

Entry Price: $0.40 (2/8/2017)
Exit Target: $1.20
Return: 112%
Stop Target: 70 cents (Stop Limit)

VIAV March 9 calls (VIAV170317C00009000, $1.75, flat)

Entry Price: $0.50 (1/25/2017)
Exit Target: $2.00 (Limit Order on third)
Return: 250%
Stop Target: $1.55 (Stop Limit)

Action: Friday’s high reached $10.73. Resistance is at $10.75-$11 with the recent 52-week peak at $10.89. I would like to see a surge past $11 this week and where we can start locking-in partial profits. Support is at $10.50.


Boston Scientific (BSX, $25.39, up $0.03)

BSX March 25 calls (BSX170317C00025000, $0.95, down $0.05)

Entry Price: $0.70 (2/7/2017)
Exit Target: $1.40
Return: 36%
Stop Target: 75 cents (Stop Limit)

Action: Friday’s high reached $25.40 and the recent 52-week peak is at $25.65. Resistance is at $25.50-$25.75. Support is at $25-$24.75.


TherapeuticsMD (TXMD, $5.61, down $0.15)

TXMD June 7.50 calls (TXMD170616C00007500, $0.55, down $0.05)

Entry Price: $0.75 (1/18/2017)
Exit Target: $1.50
Return: -27%
Stop Target: None

Action: Support is at $5.50-$5.40 with additional help at $5.25-$5. Resistance is at $6. The major moving averages are curling lower so there could be additional weakness over the near-term. However, I still love this trade for the longer-term and feel comfortable holding until mid-June. I will also have additionally commentary on the company at some point this week.