MomentumOptions.com Pre-Market Update for 6/27/2017
Tech Struggles, Small-Caps Gain
The bulls did well carrying over last week’s momentum into Monday’s open, but ran into trouble as the first half of action unfolded. The bears held near-term resistance but they struggled, as well, as they eventually gave way to higher highs. Tech failed to hold its gains and was the weakest link but volatility fell below 10 and is still signaling fresh all-time highs are in play.
The Dow advanced 14 points, or 0.1%, to settle at 21,409. The blue-chips traded to a high of 21,506 and missed a fresh all-time high by 29 points. Lower resistance at 21,500-21,600 was cleared on the 112 point pop but failed to hold. Support at 21,250-21,200 held on the backtest to 21,381.
The S&P 500 gained three-quarters of a point, or 0.03%, to end at 2,439. The index made a run to 2,450 within the opening half-hour upper resistance at 2,440-2,450 holding by a half-point. A close above the latter gets 2,500-2,525 in the mix. Rising support at 2,425-2,420 held on the one point fade to 2,437 with backup at 2,425-2,420.
The Nasdaq declined 18 points, or 0.3%, to close at 6,247. Tech cleared upper resistance at 6,250-6,275 and the 6,300 level after peaking at 6,303 shortly after the opening bell. The backtest to 6,233 held support at 6,200-6,175.
The Russell 2000 climbed nearly 2 points, or 0.1%, to finish at 1,416. The small-caps cleared the 1,420 level in the morning and afternoon with fresh resistance at 1,425-1,430 holding. The 5-point dip to 1,409 held rising support at 1,415-1,410 with a move below 1,400-1,395 signaling a possible near-term top.
The S&P 500 Volatility Index ($VIX, 9.90, down 0.12) traded down to 9.68 at the start of Monday’s action with lower support at 10-9.75 holding. The close above upper support was slightly bullish with the 52-week and multi-year low at 9.37 in play if 9.50 cracks. Lowered resistance at held 10.50 on the trip to 10.44 afterwards. Additional hurdles are at 11.50-12.50 if 10.50 fails to hold.
From desk to press, futures look like this: Dow (+1); S&P 500 (+1); Nasdaq 100 (+4).
Momentum Options Play List
Closed Momentum Options Trades for 2017: 38-15 (72%). 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, $10.04, down $0.40)
FOLD July 10 calls (FOLD170721C00010000, $0.60, down $0.15)
Entry Price: $0.70 (6/22/2017)
Exit Target: $1.40
Stop Target: None
Action: Shares traded to a 52-week high of $10.50 with lower resistance at $10.50-$10.75 holding. Upper support at $10-$9.50 held on the backtest to $9.87.
TherapeuticsMD (TXMD, $5.69, down $0.02)
TXMD August 7.50 calls (TXMD170818C00007500, $0.45, down $0.05)
Entry Price: $0.50 (6/22/2017)
Exit Target: $1.00
Stop Target: None
Action: Support at $5.50 stood strong on Monday’s dip to $5.58. Near-term resistance remains at $5.75-$6.
iPath S&P 500 VIX Futures (VXX, 12.27, down 0.27)
VXX August 14 calls (VXX170818C00014000, $0.65, down $0.10)
Entry Price: $1.20 (6/15/2017)
Exit Target: $2.40
Stop Target: None
Action: Lower support at 12.50-12.25 was tested on the session low. There is continued help at 12-11.75 on continued weakness. Lowered resistance is at 12.50-12.75.