Pre-Market Update for 5/10/2017

Split Session Slowing Momentum

8:00am (EST)

The bulls explored record highs again on Tuesday but a breakout across the board still awaits inside a continuing trading range. The action showed more bullish signs than bearish with the frustration on Wall Street continuing to show. With more pundits getting bearish this week, despite new highs, shorting a dull market hasn’t made much sense despite the advice to buy protection.

The Dow fell 36 points, or 0.2%, to end at 20,975. The blue-chips held positive territory for much of the first half trading with the high reaching 21,046. Resistance at 21,150-21,200 held with blue-sky territory to 21,450-21,600 on a move above the latter. Support remains at 20,800-20,700 with Tuesday’s low tapping 20,938.

The S&P 500 slipped 2 points, or 0.1%, to settle 2,396. The index traded to another all-time of 2,403.87 shortly after the opening bell with lower resistance at 2,400-2,425 holding. Upper support at 2,390-2,385 stood strong following the late day backtest to 2,392 ahead of the closing bell.

The Nasdaq added nearly 18 points, or 0.3%, to close at 6,120. Tech held positive territory throughout the session with the bulls pushing another record high of 6,133. Fluff and additional resistance is at 6,150-6,175. Near-term support has moved up to 6,075-6,050 with a close below the latter likely signaling a short-term top.

The Russell 2000 gained a quarter-point, or 0.02%, to finish at 1,391. The small-caps made a push to lower resistance at 1395-1,400 but a level that throughout the morning. The 4-point gain evaporated into a 5-point loss to 1,386 ahead of the closing bell with support at 1,380-1,375 holding for a “push”.

The S&P 500 Volatility Index ($VIX, 9.96, up 0.19) traded down to a decade and 52-week low of 9.56 yesterday with lowered support at 10-9.50 holding. Resistance at 10.50-11.50 easily held on the intraday pop to 10.14.

From desk to press, futures look like this: Dow (-35); S&P 500 (-3); 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.


Viavi Solutions (VIAV, $11.54, up $0.02)

June 12 calls (VIAV170616C00022500, $0.40, flat)

Entry Price: $0.35 (5/5/2017)
Exit Target: $0.70-$1.05
Return: 14%
Stop Target: None

Action: Yesterday’s high reached $11.55 and the close above lower resistance at $11.50-$11.75 was bullish. Support is at $11.25-$11.


iShares Russell 2000 (IWM, $138.35, down $0.06)

IWM June 134 puts (IWM170616P00134000, $1.10, down $0.05)

Entry Price: $1.40 (5/2/2017)
Exit Target: $2.10-$2.80
Return: -21%
Stop Target: 70 cents (Stop Limit)

Action: Near-term support is at $138-$137.50 with yesterday’s low reaching $137.78. Resistance remains at $138.50-$139.


STMicroelectronics (STM, $16.58, up $0.17)

STM July 17.50 calls (STM170721C00017500, $0.65, flat)

Entry Price: $0.55 (5/2/2017)
Exit Target: $1.10
Return: 18%
Stop Target: None

Action: Shares tested a high of $16.62 while clearing lower resistance at $16.50-$16.75. The recent 52-week high is at $16.70. Support is at $16.25-$16.


Cypress Semiconductor (CY, $13.43, up $0.27)

CY June 14 calls (CY170616C00014000, $0.35, flat)

Entry Price: $0.85 (4/20/2017)
Exit Target: $1.70
Return: -59%
Stop Target: 25 cents

Action: Resistance is at $13.50-$13.75 and the 50-day moving average with Tuesday’s high tapping $13.52. Rising support is at $13.25-$13.