MomentumOptions.com Mid-Market Update for 7/5/2017

Fed Minutes on Deck

12:40pm (EST)

The market opened higher on the first full trading day of the third-quarter but quickly lost steam as Wall Street awaits this afternoon’s Fed minutes. The Financial sector has rallied nearly 5% since last week’s upbeat Comprehensive Capital Analysis and Review that gave approval to capital plans of all 34 banks that participated. There shouldn’t be any surprises in the minutes given the current environment but the sector could pullback, if there is a curveball.

Elsewhere, Gold is struggling at the $1,220 level following Monday’s plunge below the 200-day moving average. The 50-day moving average has been rolling over since mid-June and is on track to fall below the 100-day moving average. This would form a mini death-cross that would be confirmed if the 50-day moving average falls below the 200-day moving average. The chart shows risk to $1,200-$1,180 on continued weakness and would test the March and January lows for the year. Resistance is at $1,235-$1,240.

Given the geopolitical environment, many traders have expected Gold to perform better. However, I warned the double-top from early June looked troublesome and the failure to clear $1,260 afterwards was a clear sign lower lows were coming.

Heading into the second half of trading, the Dow is down 10 points to 21,469 while the S&P 500 is adding a point to 2,430. The Nasdaq is higher by 29 points to 6,139 and the Russell 2000 is declining 13 points to 1,412.

I’m currently working on a New Trade for gold that I hope to have ready ahead of the closing bell and after the Fed minutes. For now, let’s go check on our current positions.

 

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, $24.78, up $0.10)

BAC August 25 calls (BAC170818C00025000, $0.73, up $0.030

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

Action: Resistance is at $24.75-$25. Support is at $24.50-$24.25.

 

AT&T (T, $38.04, down $0.07)

T August 37 puts (T170818P00037000, $0.60, flat)

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

Action: Support is at $38-$37.75 with a close below $37.50 being a bearish development. Resistance is at $38.25-$38.50.

 

Amicus Therapeutics (FOLD, $10.11, up $0.03)

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: Resistance is at $10.25-$10.50 with a move above the latter getting fresh 52-week highs in play. Support is at $9.75-$9.50.

 

TherapeuticsMD (TXMD, $5.38, down $0.07)

TXMD August 7.50 calls (TXMD170818C00007500, $0.40, flat)

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

Action: Support is at $5.25-$5. Near-term resistance is at $5.50 and the 100-day moving average.

 

iPath S&P 500 VIX Futures (VXX, 12.91, up 0.01)

VXX August 14 calls (VXX170818C00014000, $1.00, flat)

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

Action: Resistance is at 13-13.50. Support is at 12.75-12.50.