MomentumOptions.com Pre-Market Update for 6/30/2017
Heightened Volatility Gets Bears Growling
The bears came out swinging on Thursday after charging a slow open by the bulls to regain momentum and a little leverage heading into the last day of June. Volatility tapped its highest level since April 19th but key support levels held into the close. Today’s action should be exciting ahead of Monday’s half session and with the market closed on Tuesday.
The Dow declined 167 points, or 0.8%, to finish at 21,287. The blue-chips made a staggered run to 21,487 shortly after the open with lower resistance at 21,500-21,600 holding. Fresh and lower support at 21,250-21,200 was breached following the 290-point plunge to 21,197 afterwards. A close below the latter opens up risk to 21,100-21,000 with a move below the latter wiping out June’s gains.
The S&P 500 sank 21 points, or 0.9%, to settle at 2,419. The index peaked at 2,442 at the start of trading with resistance at 2,440-2,450 holding on the 2-point pop. The stumble to 2,405 split backup support at 2,410-2,400 but breached the 50-day moving average. The bulls need to hold 2,412 into today’s close to keep the month positive.
The Nasdaq tanked 90 points, or 1.5%, to end at 6,144. Tech traded in negative territory throughout the session with the bears pushing a low of 6,087. Lower support at 6,150-6,100 was stretched and the close back below the 6,150 level was a yellow flag. Resistance is at 6,175-6,200 with a move above the latter giving the bulls the monthly win and keeping a 7-month win streak intact for the index.
The Russell 2000 gave back 9 points, or 0.6%, to close at 1,416. The small-caps opened higher and made a push to 1,428 during the opening minutes. Upper resistance at 1,425-1,430 held with the rest of the session spent underwater. Backup and support at 1,400-1,395 held on the low of 1,403 with the just above 1,415 a neutral reading. The index came into the month at 1,370.
The S&P 500 Volatility Index ($VIX, 11.44, up 0.41) kissed 9.73 on the opening giddiness with lower support at 10-9.75 getting stretched. Near-term resistance at 11.50-12.50 held into the close but longer-term hurdles at 14.50-15 came into play on the surge to 15.16. A close above 13.50 would be a bearish signal for next week while a move below 10.50 would help the bulls.
I mentioned volatility could get serious heading ahead of and after the holiday weekend and into next week. For that matter, the whipsaw action is likely continue well into July with an incredible trading environment setting up.
I have updated our AT&T trade so let’s go take a look. I could have a New Trade today if lower lows come into play on the major indexes.
From desk to press, futures look like this: Dow (+4); S&P 500 (-1); Nasdaq 100 (-13).
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.
AT&T (T, $37.62, down $0.32)
T August 37 puts (T170818P00037000, $0.83, up $0.12)
Entry Price: $0.78 (6/29/2017)
Exit Target: $1.60
Stop Target: None
Action: Set an Exit Target at $1.60. There is no Stop Limit.
Shares closed at the day’s low with support at $37.50 holding. This represents the mid-May double bottom just south of this level. A death-cross occurred earlier this month with the 50-day moving average falling below the 200-day moving average.
The stock tapped lows of $37.46 and $37.45 on May 18th & 17th, respectively, with a move below the latter being a bearish development. If breached, there is risk to $36-$35 and the November 2016 lows. Near-term resistance is at $38-$38.50 and the 50-day moving average.
Amicus Therapeutics (FOLD, $9.93, up $0.17)
FOLD July 10 calls (FOLD170721C00010000, $0.50, flat)
Entry Price: $0.70 (6/22/2017)
Exit Target: $1.40
Stop Target: None
Action: Lower resistance at $10-$10.25 held following yesterday’s run to $9.98. Support is trying to move up to $9.75-$9.50.
TherapeuticsMD (TXMD, $5.35, down $0.37)
TXMD August 7.50 calls (TXMD170818C00007500, $0.35, down $0.10)
Entry Price: $0.50 (6/22/2017)
Exit Target: $1.00
Stop Target: None
Action: Lower support at $5.50-$5.25 came into play on the backtest to $5.34. Near-term resistance has been lowered to $5.50-$5.75.
iPath S&P 500 VIX Futures (VXX, 12.95, up 0.62)
VXX August 14 calls (VXX170818C00014000, $1.00, down $0.30)
Entry Price: $1.20 (6/15/2017)
Exit Target: $2.40
Stop Target: None
Action: Fresh resistance is at 13-13.50 following Thursday’s stretch to 14.16. The trade was up 25%, intraday, with the puts kissing $1.61 before pulling back. Rising support is at 12.75-12.50.