MomentumOptions.com Pre-Market Update for 5/5/2017
Another Sluggish Session
The market tried to rebound off its lows on Thursday but the overall weakness held up into the close with the bulls and bears splitting the win. It has been a big week for earnings and economic news with all eyes on this morning’s nonfarm payrolls reports. The bulls will be looking for some good news to help them keep fresh highs in play while the bears want disappointing numbers and the chance to push lower lows.
The Dow slipped 6 points, or 0.03%, to settle at 20,951. The blue-chips traded to a high of 20,990 on the open with resistance at 21,150-21,200 holding for the 8th-straight session. Support at 20,800-20,700 held on the midday dip to 20,847. The current trading range will start to show direction on a move above or below near-term resistance and support levels.
The S&P 500 added a point, or 0.1%, to close at 2,389. The index tested a high of 2,391 shortly after the opening bell with lower resistance at 2,390-2,400 failing to hold. The intraday fade to 2,380 held support at 2,375-2,370. The bulls will need to hold 2,380 into today’s close or next week could get rocky. A 12-point pop sets fresh record highs.
The Nasdaq climbed 2 points, or 0.1%, to finish at 6,075. Tech reached its peak of 6,080 ahead of Wall Street’s lunch break while holding lowered resistance at 6,075-6,100. The intraday low tapped 6,054 and held near-term support at 6,050 for the second-straight session. There is risk to 6,025-6,000 on a close below this level.
The Russell 2000 fell 2 points, or 0.2%, to end at 1,388. The small-caps split resistance at 1395-1,400 following the morning pop to 1,394 but spent the rest of the day underwater. Upper support at 1,380-1,375 held by a half-point on the session low with a close below the latter a bearish development.
The S&P 500 Volatility Index ($VIX, 10.46, down 0.22) reached an intraday high of 11.24 with resistance at 11.50 holding for the 8th-straight session. A close above this level opens up risk to 12.50-13.50. Upper support at 10.50-10 held following the late day test to 10.27.
I mentioned I had a few trades ready to go, depending on this morning’s action, and I also have a longer-term trade on a small-cap stock at fresh 52-week peaks.
From desk to press, futures look like this: Dow (-1); S&P 500 (+1); Nasdaq 100 (-2).
Momentum Options Play List
Closed Momentum Options Trades for 2017: 28-10 (74%). 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.
iShares Russell 2000 (IWM, $138.10, down $0.19)
IWM June 134 puts (IWM170616P00134000, $1.35, flat)
Entry Price: $1.40 (5/2/2017)
Exit Target: $2.10-$2.80
Stop Target: 70 cents
Action: Near-term support is at $137.50-$137 with yesterday’s low tapping $137.11. Resistance is at $138.50-$139.
STMicroelectronics (STM, $16.22, flat)
STM July 17.50 calls (STM170721C00017500, $0.50, flat)
Entry Price: $0.55 (5/2/2017)
Exit Target: $1.10
Stop Target: None
Action: Resistance at $16.50. Support is at $16. Yesterday’s low touched $16.08.
Cypress Semiconductor (CY, $13.32, up $0.03)
CY June 14 calls (CY170616C00014000, $0.40, flat)
Entry Price: $0.85 (4/20/2017)
Exit Target: $1.70
Stop Target: 25 cents
Action: Support is at $13.25-$13. Resistance is at $13.50.