Pre-Market Update for 6/6/2017

Bears Get Monday Win on Volatile Oil Swings

8:00am (EST)

The market pulled back on Monday following a tight trading range with near-term support holding. Some of the nervousness could have been attributed to geopolitical events surrounding the Middle East. A number of countries, including Saudi Arabia and Egypt, cut diplomatic ties with Qatar following its alleged support of terrorists. Oil prices initially spiked on the news but resumed its recent downtrend to weigh on the market.

The Dow dipped 22 points, or 0.1%, to close at 21,184. The blue-chips tested a low of 21,168 shortly after the open with upper support at 21,100-21,000 holding. The midday rebound to 21,224 fell a point shy of another all-time high and resistance at 21,450-21,500.

The S&P 500 slipped 3 points, or 0.1%, to finish 2,436. The index opened 2 points lower while trading down to 2,434 during the first 15 minutes of action. Upper support at 2,425-2,420 stood tall with risk to 2,410-2,400 on a move below the latter. The half-point intraday gain to 2,439 fell a three-quarters of a point shy of another record high with resistance at 2,450-2,460 still in play.

The Nasdaq gave back 10 points, or 0.2%, to end at 6,295. Tech was slightly weak at the start of Monday’s open but pushed another lifetime high of 6,310.62 during the first half of trading. Lower resistance at 6,325-6,350 held with fluff to 6,400-6,425 on a move above the latter. Fresh support at 6,250-6,200 easily held on the second half fade to 6,292.

The Russell 2000 fell 9 points, or 0.6%, to settle at 1,396. The small-caps traded in negative territory throughout the session while closing at the session low. Rising support at 1,390-1,385 easily held with stretch to 1,380 waiting in the wings. Resistance remains at 1,420-1,425 on continued closes above 1,405.

The S&P 500 Volatility Index ($VIX, 10.07, up 0.32) reached a peak of 10.28 on the opening ruckus with resistance at 10.50-11.50 holding for the ninth-straight session. Support at 9.75-9.50 was split following the intraday low of 9.60.

From desk to press, futures look like this: Dow (-7); S&P 500 (-2); Nasdaq 100 (-2).


Momentum Options Play List

Closed Momentum Options Trades for 2017: 33-10 (77%). 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.


Bank of America (BAC, $22.41, down $0.04)

BAC July 23 calls (BAC170721C00023000, $0.50, down $0.04)

Entry Price: $0.60 (6/5/2017)
Exit Target: $0.90-$1.20
Return: -17%
Stop Target: None

Action: Shares traded to a high of $22.70 before fading into Monday’s close. Support is at $22.25-$22. Resistance is at $22.50-$22.75.


Flex (FLEX, $17.44, down $0.18)

FLEX July 18 calls (FLEX170721C00018000, $0.43, down $0.06)

Entry Price: $0.40 (6/1/2017)
Exit Target: $0.80
Return: 8%
Stop Target: None

FLEX July 17 calls (FLEX170721C00017000, $0.90, down $0.10)

Entry Price: $0.45 (5/16/2017)
Exit Target: $1.35
Return: 100%
Stop Target: 80 cents (Stop Limit)

Action: Yesterday’s high reached $17.76 before a backtest to $17.42. Support is at $17.25-$17. Resistance is at $17.75-$18.


Sony (SNE, $37.67, down $0.08)

SNE July 37 calls (SNE170721C00037000, $1.50, flat)

Entry Price: $0.85 (5/26/2017)
Exit Target: $1.70
Return: 76%
Stop Target: $1.25 (Stop Limit)

Action: Lower resistance at $37.75-$38 was cleared on Monday’s run to $37.88 but failed to hold. Support is at $37.25-$37.


Amicus Therapeutics (FOLD, $8.41, up $0.01)

FOLD July 8 calls (FOLD170721C00008000, $0.90, flat)

Entry Price: $0.85 (5/22/2017)
Exit Target: $1.70-$2.55
Return: 6%
Stop Target: None

Action: Support at $8.25-$8 held on yesterday’s backtest to $8.21. Near-term resistance is at $8.50-$8.75.


STMicroelectronics (STM, $16.53, down $0.23)

STM October 20 calls (STM171020C00020000, $0.50, down $0.05)

Entry Price: $0.70 (5/15/2017)
Exit Target: $1.40
Return: -29%
Stop Target: None
STM July 17.50 calls (STM170721C00017500, $0.40, down $0.05)

Entry Price: $0.65 (5/15/2017)
Exit Target: $1.30
Return: -38%
Stop Target: None

Action: Shares traded to a low of $16.42 on Monday while holding upper support at $16.50-$16.25. Resistance is at $16.75-$17.


Viavi Solutions (VIAV, $11.21, down $0.18)

June 12 calls (VIAV170616C00022500, $0.10, down $0.02)

Entry Price: $0.35 (5/5/2017)
Exit Target: $0.70-$1.05
Return: -71%
Stop Target: None

Action: Upper support at $11.25-$11 was breeched with the low tapping $11.20. Resistance is at $11.50-$11.75.


Cypress Semiconductor (CY, $14.16, up $0.22)

CY June 14 calls (CY170616C00014000, $0.45, up $0.10)

Entry Price: $0.85 (4/20/2017)
Exit Target: $1.70, lower to 90 cents
Return: -47%
Stop Target: 10 cents, raise to 30 cents (Stop Limit)

Action: Lower the Exit Target from $1.70 to 90 cents. Raise the Stop Limit from 10 cents to 30 cents.

Resistance is at $14.25 and Monday’s high. Support is at $14-$13.75.