MomentumOptions.com Pre-Market Update for 5/9/2017
VIX Touches Fresh 52-Week Low
The market traded in another narrow range to start the week with much of the lackluster action to the downside. The tight session was somewhat refreshing following last week’s feverish pace of earnings and economic news. Both fronts will heat up the rest of the week with possible headwinds blowing both ways as Wall Street awaits a breakout, or breakdown, from current levels and deals with a VIX below 10.
The Dow added 5 points, or 0.03%, to finish at 21,012 on Friday. The blue-chips tested a low of 20,971 shortly after the open with solid support at 20,800-20,700 holding. Resistance at 21,150-21,200 also held on the midday rebound to 21,017. A move above the latter gets 21,450-21,600 in play.
The S&P 500 climbed a tenth-point, or 0.0%, to remain at 2,399. The index traded to a fresh all-time of 2,401.36 at the start of Monday’s opening pop but failed holding lower resistance at 2,400-2,425. Rising support is at 2,390-2,385 with a move below the latter a slightly bearish development.
The Nasdaq advanced 2 points, or 0.03%, to settle at 6,102. Tech made a run to another fresh lifetime high of 6,106.12 in the opening minutes with overhead resistance at 6,150-6,175 easily holding. Near-term support remains at 6,050 with risk to 6,025-6,000 on a close below this level.
The Russell 2000 fell 5 points, or 0.4%, to close at 1,391. The small-caps struggled throughout Monday following a half-point pop past 1,397 on the open. Upper resistance at 1395-1,400 stood tall before the steady fade to 1,386 afterwards. Support remains at 1,380-1,375 and the 50/100-day moving averages.
The S&P 500 Volatility Index ($VIX, 9.77, down 0.80) traded in negative territory throughout Monday and down to a 52-week low of 9.67 intraday. Lowered support at 10-9.50 held with continued closes below 10 a bullish sign. Lowered resistance is at 10.50-11.50.
From desk to press, futures look like this: Dow (-3); S&P 500 (-1); Nasdaq 100 (-3).
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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.
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Viavi Solutions (VIAV, $11.52, up $0.19)
June 12 calls (VIAV170616C00022500, $0.40, up $0.05)
Entry Price: $0.35 (5/5/2017)
Exit Target: $0.70-$1.05
Stop Target: None
Action: Shares traded to a 52-week high of $11.67 yesterday. Resistance is at $11.50-$11.75. Support is at $11.25-$11.
The company makes a 3D sensing filter that could be coming out on the iPhone this year. Other smartphones follow in 2018. They are the industry’s sole supplier and I have talked about this being a $15 stock throughout the year.
iShares Russell 2000 (IWM, $138.41, down $0.58)
IWM June 134 puts (IWM170616P00134000, $1.15, up $0.05)
Entry Price: $1.40 (5/2/2017)
Exit Target: $2.10-$2.80
Stop Target: 70 cents (Stop Limit)
Action: Near-term support is at $138-$137.50 with Monday’s low tapping $137.76. Resistance is at $138.50-$139.
STMicroelectronics (STM, $16.41, down $0.29)
STM July 17.50 calls (STM170721C00017500, $0.65, down $0.05)
Entry Price: $0.55 (5/2/2017)
Exit Target: $1.10
Stop Target: None
Action: Shares opened at $16.34 and the session low. Support is at $16.25-$16. Resistance is at $16.50-$16.75.
Cypress Semiconductor (CY, $13.16, down $0.29)
CY June 14 calls (CY170616C00014000, $0.35, down $0.05)
Entry Price: $0.85 (4/20/2017)
Exit Target: $1.70
Stop Target: 25 cents
Action: The close below upper support at $13.25-$13 was slightly bearish with the low checking in at $13.17. Resistance is at $13.50-$13.75 and the 50-day moving average.