Pre-Market Update for 5/26/2017

Small-Caps See Red, Add a Point

8:00am (EST)

The Nasdaq and S&P 500 posted fresh all-time highs on Thursday with the Dow and Russell 2000 still holding out hope. The action in the small-caps was slightly concerning as the index struggled underwater throughout the second half of trading. In any event, the sixth-straight day of gains shows momentum is currently favoring the bulls ahead of a three-day weekend.

The Dow jumped 70 points, or 0.3%, to end at 21,082. The blue-chips opened 50 points higher at 21,062 and reached a morning peak of 21,112 while holding positive throughout the session. Fresh resistance at 21,150-21,200 held with blue-sky territory to 21,450-21,500 on a move above these levels. The all-time high is at 21,169. Rising support at 21,000-20,900 with a close below 20,800-20,750 possibly signaling a short-term top.

The S&P 500 rallied 10 points, or 0.5%, to settle 2,415. The index opened at a fresh all-time high of 2,409 while reaching an afternoon peak of 2,418. I mentioned a run to 2,420-2,425 could come on continued strength with fresh fluff to 2,450-2,460 on a close above the latter. Rising support is at 2,400-2,390.

The Nasdaq surged 42 points, or 0.7%, to close at 6,205. Tech made a steady march to 6,217 and another lifetime high ahead of the closing bell with new resistance now at 6,250-6,275. Support has now moved up to 6,150-6,125. A move back below 6,100-6,075 might provide an opportunity to go short.

The Russell 2000 added nearly a point, or 0.1%, to finish at 1,383. The small-caps traded to a high of 1,391 shortly after the open with lower resistance at 1,390-1,400 holding for the second-straight day. Support is trying to move up to 1,380-1,375 with the upper representing yesterday’s intraday pullback. A close below 1,370 would be a bearish development.

The S&P 500 Volatility Index ($VIX, 9.99, down 0.03) tested an intraday high of 10.29 with lower resistance at 10.50-11.50 holding. Fresh support is at 9.75-9.50.

I have set a Stop Limit for FLEX so please adjust your trading accounts accordingly.

From desk to press, futures look like this: Dow (-17); S&P 500 (-2); Nasdaq 100 (+2).


Momentum Options Play List

Closed Momentum Options Trades for 2017: 32-10 (76%). 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.


Amicus Therapeutics (FOLD, $8.29, down $0.15)

FOLD July 8 calls (FOLD170721C00008000, $1.00, flat)

Entry Price: $0.85 (5/22/2017)
Exit Target: $1.70-$2.55
Return: 18%
Stop Target: None

Action: Shares traded up to $8.79 yesterday before fading into the close. Lower resistance at $8.75-$9 was cleared but failed to hold. Support at $8.25-$8 held on the backtest to $8.27.


Spider Gold Shares (GLD, $119.50, down $0.11)

GLD June 122 calls (GLD170616C00122000, $0.40, down $0.10)

Entry Price: $0.75 (5/22/2017)
Exit Target: $1.50
Return: -47%
Stop Target: None

Action: Upper support at $119.25-$119 held on Thursday’s trip to $119.29. Resistance at $119.75-$120.


Flex (FLEX, $17.13, up $0.15)

FLEX July 17 calls (FLEX170721C00017000, $0.70, up $0.10)

Entry Price: $0.45 (5/16/2017)
Exit Target: $0.90
Return: 56%
Stop Target: 55 cents (Stop Limit)

Action: Set an initial Stop Limit at 55 cents to protect profits.

Shares traded to another 52-week high of $17.20 with fresh, lower resistance at $17.25-$17.50 holding. Support is at $17-$16.75.


STMicroelectronics (STM, $16.44, up $0.08)

STM October 20 calls (STM171020C00020000, $0.55, up $0.05)

Entry Price: $0.70 (5/15/2017)
Exit Target: $1.40
Return: -21%
Stop Target: None


STM July 17.50 calls (STM170721C00017500, $0.45, up $0.05)

Entry Price: $0.65 (5/15/2017)
Exit Target: $1.30
Return: -31%
Stop Target: None

Action: Resistance at $16.50-$16.75 was split following the run to $16.62. Support is at $16.25-$16.


Viavi Solutions (VIAV, $11.18, up $0.05)

June 12 calls (VIAV170616C00022500, $0.12, flat)

Entry Price: $0.35 (5/5/2017)
Exit Target: $0.70-$1.05
Return: -66%
Stop Target: None

Action: Lower resistance at $11.25-$11.50 was cleared by a penny yesterday. Support remains at $11.


Cypress Semiconductor (CY, $14.06, up $0.17)

CY June 14 calls (CY170616C00014000, $0.50, up $0.10)

Entry Price: $0.85 (4/20/2017)
Exit Target: $1.70
Return: -41%
Stop Target: None

Action: Lower resistance at $14-$14.25 was cleared on yesterday’s push to $14.11. Rising support is at $13.75-$13.50.