MomentumOptions.com Pre-Market Update for 5/31/2017

Small-Caps Close Below Major MA’s

8:00am (EST)

The market traded in another tight range on light volume as the bears snapped a seven-session losing streak on the S&P 500’s pullback. The bulls easily held near-term support but some sectors struggled, especially energy, which helped slow momentum. Volatility was slightly elevated but held near-term resistance on the close back above 10 but trouble in the small-caps is becoming a bigger concern.

The Dow dipped 51 points, or 0.2%, to close at 21,029. The blue-chips struggled throughout the session after opening lower at 21,045 and trading down to 21,009. Fresh support at 21,000-20,900 easily held with risk to 20,800-20,750 and the 50-day moving average on a move below the latter. Resistance remains at 21,150-21,200 with the all-time high at 21,169. A close above the latter could lead to a run to 21,450-21,500.

The S&P 500 fell 3 points, or 0.1%, to finish 2,412. The index also traded in negative territory throughout Tuesday with the low reaching 2,409. Support at 2,400-2,390 held for the fifth-straight session with risk to 2,380-2,375 and the 50-day moving average on a move below the latter. Resistance is at 2,420-2,425 and the 52-week high of 2,418. There is breakout potential to 2,450-2,460 on a close above the latter.

The Nasdaq gave back 7 points, or 0.1%, to end at 6,203. Tech showed a little strength after the open and traded past 6,217 but missed a fresh all-time high by a fifth-point. Resistance at 6,250-6,275 held with fluff to 6,300-6,350 on continued momentum. Rising support at 6,175-6,150 held on the backtest to 6,200 with a close below 6,125 an opportunity to possibly go short.

The Russell 2000 declined 11 points, or 0.8%, to settle at 1,371. The small-caps bled red from the open with the late-day tumble reaching 1,370. I mentioned a close below 1,370-1,365 and the 50/100-day moving averages would be a bearish development. There is wiggle room to 1,360 on the stretched close. A recovery past the 1,380 level and the major MA’s, today, would be a slightly bullish sign with additional resistance at 1,385-1,390.

The S&P 500 Volatility Index ($VIX, 10.38, up 0.57) opened higher and back in double-digits with yesterday’s high tapping 10.84. Resistance at 10.50-11.50 was breeched but held into the closing bell. Support remains at 9.75-9.50.

From desk to press, futures look like this: Dow (+19); S&P 500 (+3); Nasdaq 100 (+14).

 

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.

 

Sony (SNE, $36.48, down $0.20)

SNE July 37 calls (SNE170721C00037000, $0.85, down $0.15)

Entry Price: $0.85 (5/26/2017)
Exit Target: $1.70
Return: 0%
Stop Target: None

Action: Yesterday’s backtest to $36.39 held near-term support at $36.25-$36. Resistance at $36.75-$37 was tested on the midday run to $36.70.

 

Amicus Therapeutics (FOLD, $7.66, down $0.27)

FOLD July 8 calls (FOLD170721C00008000, $0.65, down $0.10)

Entry Price: $0.85 (5/22/2017)
Exit Target: $1.70-$2.55
Return: -24%
Stop Target: None

Action: Lower support at $7.75-$7.50 held on yesterday’s low of $7.54. Resistance is at $8.

 

Spider Gold Shares (GLD, $120.14, down $0.40)

GLD June 122 calls (GLD170616C00122000, $0.55, down $0.15)

Entry Price: $0.75 (5/22/2017)
Exit Target: $1.50
Return: -27%
Stop Target: None

Action: Support at $119.25-$119 held on the trip to $119.95 on Tuesday. Resistance is at $121-$121.50.

 

Flex (FLEX, $17.25, up $0.29)

FLEX July 17 calls (FLEX170721C00017000, $0.75, up $0.15)

Entry Price: $0.45 (5/16/2017)
Exit Target: $0.90
Return: 67%
Stop Target: 47 cents (Stop Limit)

Action: Shares made a push to $17.33 intraday to clear lower resistance at $17.25-$17.50. Support is at $17-$16.75.

 

STMicroelectronics (STM, $16.56, up $0.06)

STM October 20 calls (STM171020C00020000, $0.55, flat)

Entry Price: $0.70 (5/15/2017)
Exit Target: $1.40
Return: -21%
Stop Target: None
STM July 17.50 calls (STM170721C00017500, $0.45, flat)

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

Action: Yesterday’s peak reached $16.60. Resistance is at $16.75-$17. Support is at $16.25-$16.

 

Viavi Solutions (VIAV, $11.29, down $0.07)

June 12 calls (VIAV170616C00022500, $0.16, flat)

Entry Price: $0.35 (5/5/2017)
Exit Target: $0.70-$1.05
Return: -54%
Stop Target: None

Action: Upper support at $11.25-$11 was breeched with Tuesday’s low touching $11.23. Resistance is at $11.25-$11.50.

 

Cypress Semiconductor (CY, $13.89, up $0.06)

CY June 14 calls (CY170616C00014000, $0.40, flat)

Entry Price: $0.85 (4/20/2017)
Exit Target: $1.70
Return: -53%
Stop Target: None

Action: Resistance at $14-$14.25 held on the run to $13.94. Support is at $13.75-$13.50.