Pre-Market Update for 4/7/2017

Bears Holding Weekly Lead

8:00am (EST)

The market suffered another late session pullback on Thursday but this time, the bulls held positive territory into the closing bell. Comments from the President concerning Syria and North Korea may have contributed to the nervousness and come ahead of this morning’s jobs report. The bears are holding the weekly lead and Friday’s have been choppy due to the nervousness of staying long over the weekend.

The Dow gained 14 points, or 0.1%, to finish at 20,662. The blue-chips traded to a low of 20,612 shortly after the opening bell with upper support at 20,600-20,550 holding for the 8th-straight session. The midday push to 20,746 held resistance at 20,750-20,800 with a move above the latter a bullish development.

The S&P 500 added 4 points, or 0.2%, to settle at 2,357. The index slipped below upper support at 2,350-2,340 following the 4-point flop on the open to 2,348. The second half run to 2,364 failed near-term resistance at 2,370-2,375. A move above 2,380 would be a bullish signal while a close below 2,335 would be bearish. These are the two levels to watch today and into next week.

The Nasdaq climbed 14 points, or 0.3%, to close at 5,878. Tech tested a low of 5,856 at the start of trading for the second-straight session with support at 5,850 holding. This could signal a temporary “double bottom” but it is certainly too soon to say. The rebound to 5,889 intraday fell shy of upper resistance at 5,900-5,925.

The Russell 2000 jumped a dozen points, or 0.9%, to end at 1,364. The small-caps held upper support at 1,350-1,340 following the morning trip to 1,349. It will be imperative these levels hold into the weekend. Resistance remains at 1,375-1,380 and the 50-day moving average with the index going out just off its session high on the close.

The S&P 500 Volatility Index ($VIX, 12.39, down 0.50) made a high of 13.22 on the morning scuffle with upper resistance at 12.50-13.50 holding. The fade to 11.70 during the second half of trading fell shy of support at 11.50-11.

Futures were lower throughout the night following news the US launched an airstrike on Syria. Geopolitical events usually have a major impact on the market, and the nervousness was to be expected. The market’s reaction and today’s close will be important clues on how next week potentially shakes out.

I have updated the Stop Limit for our TXMD trade.

From desk to press, futures look like this: Dow (-61); S&P 500 (-7); Nasdaq 100 (-16).


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, $15.39, up $0.20)

STM May 15 calls (STM170519C00015000, $1.10, up $0.10)

Entry Price: $1.15 (3/31/2017)
Exit Target: $2.30
Return: -4%
Stop Target: 55 cents

Action: Resistance is at $15.50-$15.75 with Thursday’s high tapping $15.44. Support is trying to move up to $15.25-$15.


TherapeuticsMD (TXMD, $8.09, up $0.12)

TXMD May 7.50 calls (TXMD170519C00007500, $1.30, up $0.10)

Entry Price: $0.80 (3/27/2017)
Exit Target: $1.60
Return: 62%
Stop Target: 85 cents, raise to 95 cents (Stop Limit)

Action: Raise the Stop Limit from 85 cents to 95 cents.

Fresh resistance is at $8.25-$8.50 following yesterday’s pop to $8.30. Support is at $7.75-$7.50 if $8 fails to hold.


Viavi Solutions (VIAV, $10.26, up $0.34)

VIAV May 12 calls (VIAV170519C00012000, $0.10, flat)

Entry Price: $0.29 (3/27/2017)
Exit Target: $0.60
Return: -66%
Stop Target: None

VIAV April 11 calls (VIAV170421C00011000, $0.05, flat)

Entry Price: $0.42 (3/20/2017)
Exit Target: $0.85
Return: -88%
Stop Target: None

Action: Shares traded to a high of $10.28 yesterday. Resistance is at $10.50. Support is at $10-$9.75.


Amicus Therapeutics (FOLD, $6.85, down $0.12)

FOLD April 8 calls (FOLD170421C00008000, $0.05, down $0.05)

Entry Price: $0.60 (3/2/2017)
Exit Target: $1.20
Return: -92%
Stop Target: None

Action: Support is at $6.75 with Thursday’s low reaching $6.71. Resistance is at $7-$7.25. I would like to see a close back above $7 today. Biotech stocks often make huge moves so I still want to keep this trade open into expiration.


Tower Semiconductor (TSEM, $22.48, up $0.13)

TSEM April 24 calls (TSEM170421C00024000, $0.10, flat)

Entry Price: $0.65 (3/1/2017)
Exit Target: $1.30
Return: -85%
Stop Target: None

Action: Resistance is at $22.50-$22.75 with shares reaching $22.54 yesterday. Support is at $22.25-$22.


Flex (FLEX, $16.45, up $0.04)

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

Entry Price: $0.35 (2/15/2017)
Exit Target: $0.70
Return: -86%
Stop Target: None

Action: Resistance is at $16.50-$16.75. Support is at $16.25-$16. This is our longest running trade and shares are still within striking distance of the 52-week high of $16.99. The company will announce earnings on April 27th and a catalyst that could propel shares towards $18-$20. However, these options will expire before then and we need shares to clear $17 in two weeks. I also expect to keep this trade open through expiration.