Pre-Market Update for 4/4/2017

Monday Blues Continue

8:00am (EST)

The bears continued their opening of the week party spoiler with the blue-chips falling for the fifth-straight Monday. The other indexes were also weak despite showing a some strength on the open. The failure to capture and regain momentum hurt the bulls, to a degree, but near-term support held and is keeping a mini-trading range intact ahead of 1Q earnings season.

The Dow declined 13 points, or 0.1%, to settle at 20,650. The blue-chips showed a little pop at the start of trading but stalled at 20,692 with resistance at 20,750-20,800 easily holding. The midday fade to 20,517 stretched lower support at 20,600-20,550. A close below the latter gets 20,400-20,350 in play.

The S&P 500 fell nearly 4 points, or 0.2%, to close at 2,358. The index made a 3-point run to 2,365 on the open with resistance at 2,370-2,375 holding for the fifth-straight session. Lower support at 2,360-2,350 was breeched following the low of 2,344. Additional help is at 2,340-2,335 on continued closes below the latter.

The Nasdaq dropped 17 points, or 0.2%, to end at 5,894. Tech tested another all-time intraday high of 5,928 but failed to hold 5,925. Continued closes above this level keeps 5,975-6,000 and higher fluff targets in the mix. Lower support at 5,900-5,875 quickly came into play on the backtest to 5,367. I mentioned a move below 5,850 this week would be a bearish development.

The Russell 2000 sank 16 points, or 1.2%, to finish at 1,369. The small-caps reached a peak of 1,388 during the opening action but failed the 1,390 level and resistance at 1,395-1,400. The close back below shaky support at 1,375-1,370 and the 50-day moving average was slightly bearish following the fade to 1,366. I mentioned there was wiggle room down to 1,365-1,360 this week with a close below the latter a reason for concern.

The S&P 500 Volatility Index ($VIX, 12.38, up 0.01) peaked at 13.59 intraday with upper resistance at 12.50-13.50 getting tested but holding. The low of 12.27 came no where near support at 11.50-11.

From desk to press, futures look like this: Dow (-48); S&P 500 (-6); Nasdaq 100 (-11).


Momentum Options Play List

Closed Momentum Options Trades for 2017: 21-4 (84%). 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 a Trade Alert outside of these time frames.


STMicroelectronics (STM, $15.28, down $0.18)

STM May 15 calls (STM170519C00015000, $1.05, down $0.10)

Entry Price: $1.15 (3/31/2017)
Exit Target: $2.30
Return: -9%
Stop Target: 55 cents

Action: Support is at $15.25-$15 with yesterday’s low reaching $15.17. Resistance at $15.50-$15.75.


TherapeuticsMD (TXMD, $7.42, up $0.22)

TXMD May 7.50 calls (TXMD170519C00007500, $0.95, up $0.05)

Entry Price: $0.80 (3/27/2017)
Exit Target: $1.60
Return: 19%
Stop Target: None

Action: Monday’s high tapped $7.43. Fresh resistance is at $7.50-$7.75. Support is at $7-$6.75. Shares cleared $8 in after-hours trading on positive Phase 3 results for a menopause drug in development. If the gains hold, it will be a multi-month breakout that could lead to a run towards $10.


Viavi Solutions (VIAV, $10.35, down $0.37)

VIAV May 12 calls (VIAV170519C00012000, $0.15, down $0.09)

Entry Price: $0.29 (3/27/2017)
Exit Target: $0.60
Return: -48%
Stop Target: None

VIAV April 11 calls (VIAV170421C00011000, $0.15, down $0.08)

Entry Price: $0.42 (3/20/2017)
Exit Target: $0.85
Return: -64%
Stop Target: None

Action: Support is at $10.25 with yesterday’s low touching $10.32. Resistance is at $10.50-$10.75.


Amicus Therapeutics (FOLD, $7.23, up $0.10)

FOLD April 8 calls (FOLD170421C00008000, $0.15, flat)

Entry Price: $0.60 (3/2/2017)
Exit Target: $1.20
Return: -75%
Stop Target: None

Action: Shares traded up to $7.42 on Monday. Resistance is at $7.25-$7.50. Support is at $7-$6.75.


Tower Semiconductor (TSEM, $22.67 down $0.38)

TSEM April 24 calls (TSEM170421C00024000, $0.15, down $0.10)

Entry Price: $0.65 (3/1/2017)
Exit Target: $1.30
Return: -77%
Stop Target: None

Action: Support is at $22.75-$22.50. Yesterday’s low reached $22.64. Resistance is at $23-$23.25.


Flex (FLEX, $16.68, down $0.12)

FLEX April 17 calls (FLEX170421C00017000, $0.15, down $0.05)

Entry Price: $0.35 (2/15/2017)
Exit Target: $0.70
Return: -57%
Stop Target: None

Action: Support is at $16.50-$16.25. Resistance is at $16.75-$17.