Pre-Market Update for 4/19/2017

Another Pullback

8:00am (EST)

The bulls let Wall Street down on Tuesday as there was zero momentum from Monday’s oversold bounce. The outcome wasn’t too surprising as the back-and-forth action continues within a longer-term trading range. Upper levels of support held on the pullback with the bears still targeting March lows and levels that could lead to additional selling pressure, if breeched.

The Dow fell 113 points, or 0.6%, to close at 20,523. The blue-chips traded in negative territory throughout the session with the low reaching 20,462. Support at 20,400-20,350 held with risk to 20,200-20,000 on a close below the latter. Resistance is at 20,600-20,650.

The S&P 500 dropped 6 points, or 0.3%, to finish at 2,342. The index also opened lower and tested a bottom of 2,334. Support at 2,325-2,300 and the 100-day moving average remains in play if 2,335 fails to hold. Resistance is at 2,360-2,370.

The Nasdaq gave back 7 points, or 0.1%, to end at 5,849. Tech made a slight run into positive territory shortly after the open to 5,860 with middle resistance at 5,850-5,875 holding. Upper support at 5,825-5,800 held on the midday backtest to 5,828.

The Russell 2000 gained nearly a point, or 0.1%, to settle just under 1,362. The small-caps slipped to a low of 1,351 with upper support at 1,350-1,340 standing tall. Resistance is at 1,370-1,375 with a close above the latter being a very bullish signal.

The S&P 500 Volatility Index ($VIX, 14.42, down 0.24) kissed an intraday peak of 15.50 with resistance at 17-17.50 easily holding. The move down to 14.29 afterwards and into the close cleared lower support at 15-14.50. The bulls still need to recover 13.50-12.50 this week to keep volatility in check.

I have updated the parameters of our VIAB trade so let’s go check the tape.

From desk to press, futures look like this: Dow (+5); S&P 500 (+3); Nasdaq 100 (+7).
Momentum Options Play List

Closed Momentum Options Trades for 2017: 22-9 (71%). 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.
Viacom (VIAB, $44.09, up $0.13)

VIAB June 47.50 calls (VIAB170616C00047500, $0.65, up $0.05)

Entry Price: $0.55 (4/18/2017)
Exit Target: $1.10
Return: 18%
Stop Target: None

Action: Set an Exit Target at $1.10. There is no Stop Target.

Support is at $43.75 and the 50-day moving average followed by $43.50-$43. Resistance is at $44.50-$44.75 with a move above the latter being a bullish development.
Best Buy (BBY, $48.52, up $0.16)

BBY May 45 puts (BBY170519P00045000, $0.45, down $0.10)

Entry Price: $0.57 (4/13/2017)
Exit Target: $1.15
Return: -21%
Stop Target: None

Action: Resistance at $48.75-$49 was stretched but held following Tuesday’s trip to $49.31. Support is at $48-$47.50.
STMicroelectronics (STM, $14.58, down $0.27)

STM May 15 calls (STM170519C00015000, $0.60, down $0.10)

Entry Price: $1.15 (3/31/2017)
Exit Target: $2.30
Return: -48%
Stop Target: 55 cents, lower to 40 cents (Stop Limit)

Action: Lower the Stop Target from 55 cents to 40 cents and make it a Stop Limit.

Support is at $14.50-$14.25 with yesterday’s low reaching $14.43. Resistance is at $14.75-$15 and the 50-day moving average.