Easy Money Options Weekly Review for 6/28/2017
Tech Struggles, Small-Caps Gain/ Trade Alert (FLEX)/ Profit Alert (FOLD)
The bulls ran into trouble on Tuesday after trying to hold their slight momentum for the month as Tech fell for the second-straight session. The Financial sector did well and helped keep the bears from doing serious technical damage. However, it may not be enough as the Nasdaq closed below a key level support.
The Dow dropped over 98 points, or 0.5%, to end at 21,310. The blue-chips tested a high of 21,440 shortly after the opening bell with lower resistance at 21,500-21,600 holding for the 7th-straight session. Support at 21,250-21,200 is back in play following the close at the day’s low. There is risk to 21,100-21,000 on a move below the latter and an opportunity to possible go short using DIA put options.
The S&P 500 fell 19 points, or 0.8%, to close at 2,419. The index traded to an intraday high of 2,440 with lower resistance at 2,440-2,450 holding. The lower high was a bearish sign as the close on the low breached lower support at 2,425-2,420 by a point. This sets up a possible backtest to 2,410-2,400 on further weakness.
The Nasdaq sank 100 points, or 1.6%, to finish at 6,146. Tech traded in negative territory throughout Tuesday and was saved by the closing bell on the move below 6,150. I have highlighted this level as a crucial battle throughout June with fresh support now at 6,125-6,100. It is possible the 6,000 area comes into play on a close below the latter. Prior support at 6,200-6,175 is now resistance.
The Russell 2000 gave back 13 points, or 0.9%, to settle at 1,403. The small-caps made a push to 1,420 midday with resistance at 1,425-1,430 easily holding. The fade to the session low held backup support 1,400-1,395 with an opportunity to use IWM put options on a move below the latter. Lowered resistance is at 1,410-1,415. Note: Last week’s low tapped 1,398 and 1,396 but there are multiple levels of support in the 1,380’s.
The S&P 500 Volatility Index ($VIX, 11.06, up 1.16) jumped 11% after making its first double-digit move for the month. The low of 9.80 came shortly after the open with lower support at 10-9.75 holding. The surge to 11.31 held near-term resistance at 11.50-12.50. A close above the latter could spark additional selling pressure and a possible pop to 13.50-15.
I often talk about stretch and why I was watching yesterday’s close intently. The recent whipsaw action can be tricky to trade but lower lows will likely come into play if the bulls fail to get the Nasdaq past 6,150-6,175 during this morning’s first half of action.
The market has done well absorbing the pullback in oil and energy stocks and the sector rotation that has occurred throughout the month. There could be buying ahead of the quarter and June close with three trading sessions left and why we have to be careful of a shakeout. The good news is the portfolio remains light and once a clearer trend is in place, there will be plenty of opportunities to make money.
From desk to press, futures look like this: Dow (-10); S&P 500 (-2); Nasdaq 100 (-16).
Closed Easy Money Options Trades for 2017: 9-9 (50%). All trades are dated and time stamped so new subscribers can look at the past history to see how the trades have played out.
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 from the Monday morning update or the Trade Alerts throughout the week.
Amicus Therapeutics (FOLD, $9.72, down $0.32)
FOLD July 8 calls (FOLD170721C00008000, $2.00, down $0.20)
Entry Price: $1.07 (6/14/2017)
Exit Target: $2.15
Stop Target: $2.05 (Stop Limit)
Action: The Stop Limit at $2.05 on the backtest to upper support at $9.75-$9.50.
Flex (FLEX, $16.46, down $0.51)
FLEX July 17 calls (FLEX170721C00017000, $0.17, down $0.18)
Entry Price: $0.85 (6/1/2017)
Exit Target: $1.70
Stop Target: 20 cents (Stop Limit)
Action: The Stop Limit at 20 cents tripped on yesterday’s fade to $16.44.
TherapeuticsMD (TXMD, $5.68, down $0.01)
TXMD September 7.50 calls (TXMD170519C00007500, $0.50, flat)
Entry Price: $1.30 (3/17/2017)
Exit Target: $2.60
Stop Target: None
Action: Support is at $5.50 and the 100-day moving average. Near-term resistance is at $5.75-$6 and the 200-day moving average.