MomentumOptions.com Pre-Market Update for 4/25/2017
VIX Sinks 26%
The short-sellers ran for cover on Monday as the market and Tech surged past resistance to set a fresh record high. The major indexes are at their best levels of the month and have turned positive for April following Monday’s gains. Volatility also dropped below a key level of support and might entice Wall Street to chase the breakout on continued momentum.
The Dow jumped 216 points, or 1.1%, to close at 20,763. The blue-chips opened 176 points higher at 20,723 while reaching a peak of 20,792. Upper resistance at 20,700-20,800 held but the close above the 50-day moving average was a bullish development. Support has moved up to 20,600-20,550.
The S&P 500 soared 25 points, or 1.1%, to finish at 2,374. The index easily cleared upper resistance at 2,360-2,370 after opening at the upper end of this level while reaching a peak of 2,376. Fresh hurdles are at 2,390-2,400 on a move above 2,380. Support has moved up to 2,360-2,355 and the 50-day moving average.
The Nasdaq zoomed 73 points, or 1.2%, to end at 5,983. Tech opened at a record high of 5,979 and reached a peak of 5,989.92 intraday. I mentioned there was breakout potential to 5,975-6,000 and a close above the latter could lead to fluff up to 6,075-6,100 over the near-term. My yearend target for Tech from February is at 6,300-6,350. Rising support is at 5,925-5,900.
The Russell 2000 rallied 18 points, or 1.3%, to settle just south of 1,398. The small-caps made several attempts to clear upper resistance at 1,395-1,400 throughout the session while reaching an intraday high of 1,399.96. A close above the latter gets 1,415-1,425 and fresh all-time highs back in play. The current record high is at 1,414.82. Support is at 1,385 followed by 1,375-1,370 and the 50/100-day moving averages.
The S&P 500 Volatility Index ($VIX, 10.84, down 3.79) plunged 26% while trading to a low of 10.82. The move below 13.50-12.50 was a very bullish development and now represents resistance if 11.50 fails to hold. Support is at 10.50-10 with a close below the latter leading to 9.50-9 and single-digits. The 52-week low is at 9.97.
From desk to press, futures look like this: Dow (+48); S&P 500 (+3); Nasdaq 100 (xx); Russell (+11).
Momentum Options Play List
Closed Momentum Options Trades for 2017: 23-10 (70%). 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.
Snap (SNAP, $21.20, up $0.27)
SNAP May 23 calls (SNAP170519C00023000, $0.80, flat)
Entry Price: $0.75 (4/21/2017)
Exit Target: $1.50
Stop Target: None
Action: Fresh resistance is at $21.25-$21.50 with yesterday’s high tapping $21.30. Rising support is at $20.75-$20.50.
Cypress Semiconductor (CY, $14.08, up $0.09)
CY June 14 calls (CY170616C00014000, $0.90, up $0.05)
Entry Price: $0.85 (4/20/2017)
Exit Target: $1.70
Stop Target: None
Action: Resistance is at $14.25-$14.50. Monday’s high reached $14.29. Support is at $13.75-$13.50.
Square (SQ, $17.85, up $0.36)
SQ June 18 calls (SQ170616C00018000, $1.05, up $0.10)
Entry Price: $0.95 (4/20/2017)
Exit Target: $1.90
Stop Target: None
Action: Resistance is at $18-$18.25 with yesterday’s top reaching $17.93. Support is at $17.50-$17.25.
STMicroelectronics (STM, $15.44, up $0.80)
STM May 15 calls (STM170519C00015000, $1.00, up $0.40)
Entry Price: $1.15 (3/31/2017)
Exit Target: $2.30
Stop Target: 40 cents (Stop Limit)
Action: Fresh resistance is at $$15.50-$15.75 following Monday’s surge to $15.52. Support is at $15-$14.75.