Pre-Market Update for 7/5/2017

Dow Taps Record High/ Nasdaq Falls

8:00am (EST)

The bulls got off to a good start on Monday while pushing higher highs during the first half hour of trading. The blue-chips reached another record level an hour before the shortened session but Tech faded following an opening pop and closed in the red. Financial stocks showed continued strength with the Transports breaking out to fresh highs for the year.

The Dow jumped 129 points, or 0.6%, to end at 21,479 on Monday. The blue-chips opened higher at 21,392 while reaching an intraday peak of 21,562. Upper resistance at 21,500-21,600 held and the close below both was slightly disappointing. Support remains at 21,250-21,200.

The S&P 500 gained 5 points, or 0.2%, to close at 2,429. The index also held positive territory throughout the session while tapping an intraday high of 2,439. Lower resistance at 2,440-2,450 held for the 10th-straight session. Shaky support is at 2,425-2,420 with 2,410-2,400 and the 50-day moving average still in play on a move below 2,415.

The Nasdaq dropped 30 points, or 0.5%, to finish at 6,110. Tech opened 23 points higher at 6,173 and cleared lower resistance at 6,175-6,200 shortly afterwards while peaking at 6,177. The fade to 6,106 into the closing bell held lower support at 6,125-6,100. The 6,150 level and the 50-day moving average has held in three of the past four sessions. A move below 6,075 this week would be a bearish development.

The Russell 2000 declined a point, or 0.8%, to settle at 1,415. The small-caps also held green throughout Monday while making a run to 1,429 in the final minutes of action. The close above lower resistance at 1,425-1,430 was slightly bullish with a move above the latter leading to a possible push towards 1,440-1,450.

The S&P 500 Volatility Index ($VIX, 11.22, up 0.04) stayed below the 10.50 level ahead of the final hour of trading while tapping a low of 10.28. Support at 10-9.75 has been holding for six-straight sessions. Lower resistance at 11.50-12.50 held on the spike to 11.45 into the close.

From desk to press, futures look like this: Dow (+9); 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.


Bank of America (BAC, $24.68, up $0.42)

BAC August 25 calls (BAC170818C00025000, $0.70, up $0.15)

Entry Price: $0.75 (7/3/2017)
Exit Target: $1.50
Return: -7%
Stop Target: None

Action: Shares traded to a high of $24.91 on Monday with upper resistance at $24.75-$25 holding. Rising support is at $24.50-$24.25.


AT&T (T, $38.11, up $0.38)

T August 37 puts (T170818P00037000, $0.60, down $0.15)

Entry Price: $0.78 (6/29/2017)
Exit Target: $1.60
Return: -23%
Stop Target: None

Action: Shares made a run to $38.13 while holding lower resistance at $38-$38.25. Shaky support is at $38-$37.75 with a close below $37.50 being a bearish development.


Amicus Therapeutics (FOLD, $10.08, up $0.01)

FOLD July 10 calls (FOLD170721C00010000, $0.55, flat)

Entry Price: $0.70 (6/22/2017)
Exit Target: $1.40
Return: -21%
Stop Target: None

Action: Monday’s high tapped $10.33. Resistance is at $10.25-$10.50 with a move above the latter getting fresh 52-week highs in play. Support remains at $9.75-$9.50.


TherapeuticsMD (TXMD, $5.45, up $0.18)

TXMD August 7.50 calls (TXMD170818C00007500, $0.40, up $0.05)

Entry Price: $0.50 (6/22/2017)
Exit Target: $1.00
Return: -20%
Stop Target: None

Action: Near-term resistance at $5.50 and the 100-day moving average held with Monday’s peak reaching $5.46. Support is at $5.25-$5.


iPath S&P 500 VIX Futures (VXX, 12.90, up 0.14)

VXX August 14 calls (VXX170818C00014000, $1.00, up $0.10)

Entry Price: $1.20 (6/15/2017)
Exit Target: $2.40
Return: -17%
Stop Target: None

Action: Lower support at 12.75-12.50 held on Monday’s backtest to 12.47. Lower resistance at 13-13.50 was tested in the last hour of trading with the high kissing 12.94.