Pre-Market Update for 7/11/2017

Mixed Session on Light Volume

8:00am (EST)

The market traded mostly higher for the second-straight session as Tech continued to rebound. The small-caps and Dow showed some weakness and the overall gains were limited as investors await the start of 2Q earnings season. While there are a number of key announcements throughout the week, Friday’s earnings reports from four major U.S. banks are the most anticipated.

The Dow slipped nearly 6 points, or 0.03%, to end at 21,408. The blue-chips opened lower at 21,381 and tested 21,371 before rebounding afterwards for much of the session. Upper support at 21,300-21,250 easily held. The high of 21,446 intraday fell shy of resistance at 21,500-21,600.

The S&P 500 added 2 points, or 0.1%, to close at 2,427. The index traded down to 2,422 shortly after the opening bell with support is at 2,410-2,400 hardly threatened. The push to 2,432 fell short of the 2,435 level with additional hurdles at 2,440-2,450.

The Nasdaq climbed 23 points, or 0.4%, to finish at 6,176. Tech was slightly weak on the open after falling 12 points to 6,141. Support is trying to move up to 6,125-6,100 with 6,075 being a possible breaking point for the bulls. Upper resistance at 6,175-6,200 was tested on the run to 6,191 into the closing bell. Continued closes above the latter would hurt the bears.

The Russell 2000 fell 7 points, or 0.5%, to settle at 1,408. The small-caps kissed 1,405 a half hour into the session with upper support at 1,400-1,395 holding. The midday rise to 1,418 tested upper resistance at 1,415-1,420 before the close below the 1,410 level. This was a slightly bearish development.

The S&P 500 Volatility Index ($VIX, 11.11, down 0.08) traded to a high of 11.73 in the opening minutes with lower resistance at 11.50-12.50 getting breached. The fade to 10.61 during the second half of action held support at 10.75. The more important levels for the bulls to clear are at 10.50-10.25.

The choppy and tight action has been frustrating to trade but all of our current positions extend into August as I have prepared for the late June pullback and consolidation into earnings season. Light volume has contributed to the listless trading this month and could last for another day or two until upcoming comments from the Fed and earnings start to roll in. I have covered a dozen trade possibilities over the past few weeks. We just need to be patient.

From desk to press, futures look like this: Dow (+26); S&P 500 (+2); Nasdaq 100 (+6).


Momentum Options Play List

Closed Momentum Options Trades for 2017: 39-15 (74%). 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, $24.89, up $0.06)

BAC August 25 calls (BAC170818C00025000, $0.73, down $0.05)

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

Action: Lower resistance at $25-$25.25 held with yesterday’s high reaching $24.99. Support is at $24.75-$24.50.


AT&T (T, $36.83, down $0.15)

T August 37 puts (T170818P00037000, $0.73, down $0.07)

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

Action: Shares finished a penny off the intraday low into the close. Support is at $36.75-$36.50. Resistance is at $37.25-$37.50.


TherapeuticsMD (TXMD, $4.80, down $0.21)

TXMD August 7.50 calls (TXMD170818C00007500, $0.35, down $0.05)

Entry Price: $0.50 (6/22/2017)
Exit Target: $1.00
Return: -30%
Stop Target: None

Action: Support is at $4.75 and the 50-day moving average with Monday’s low tapping $4.76. Lower resistance is at $5-$5.25.


iPath S&P 500 VIX Futures (VXX, 12.76, down 0.32)

VXX August 14 calls (VXX170818C00014000, $0.75, down $0.15)

Entry Price: $1.20 (6/15/2017)
Exit Target: $2.40
Return: -38%
Stop Target: None

Action: Lower support at 13-12.75 held into the close on the backtest to 12.66. Lower resistance is at 13.25-13.50.