Pre-Market Update for 7/14/2017

Bulls Show a Little Follow Through

8:00am (EST)

The market resumed its tight trading range on Thursday following a second day of comments on monetary policy from Federal Reserve Chair Janet Yellen. There was some strength at the start of trading but all-time highs were put on hold following the choppy action afterwards.

This morning’s earnings reports from four major banking companies also played a role in the hesitation to higher highs but the positive closes across the board for the major indexes were bullish signs.

The Dow gained 21 points, or 0.1%, to finish at 21,553. The blue-chips slipped to a low of 21, 512 shortly after the open with the 20-point loss easily holding support at 21,350-21,300. Upper resistance at 21,500-21,600 held on the late session push to 21,568.

The S&P 500 climbed 4 points, or 0.2%, to close at 2,447. The index held the 2,440 level on the 2-point dip to 2,441 with support at 2,425-2,420 coming into play, if breached. Upper resistance at 2,440-2,450 held by a point into the losing bell.

The Nasdaq advanced 13 points, or 0.2%, to settle at 6,274. Tech fell 10 points to 6,251 on the morning weakness with support moving up to 6,225-6,200. I mentioned a pop past 6,275 would be bullish for another look at 6,300-6,350. Yesterday’s opening test to 6,281 and one-point close below 6,275 were bullish signals.

The Russell 2000 gained a point, or 0.1%, to end at 1,425. The small-caps made a three-quarter point move past 1,425 on the open to clear upper resistance at 1,420-1,425. The backtest to 1,416 and hour afterwards held support at 1,415-1,410 by a point.

The S&P 500 Volatility Index ($VIX, 9.90, down 0.40) tested a high of 10.40 on the opening market pop with 10.50 holding. Additional resistance is at 11.25-11.50 if this level fails to hold. The close on the session low cleared upper support at 10-9.50.

From desk to press, futures look like this: Dow (+6); S&P 500 (flat); Nasdaq 100 (+1).


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.


Cypress Semiconductor (CY, $14.31, up $0.34)

CY August 15 calls (CY170818C00015000, $0.55, up $0.15)

Entry Price: $0.40 (7/12/2017)
Exit Target: $0.80
Return: 38%
Stop Target: None

Action: Lowered resistance at $14.25-$14.50 was cleared on yesterday’s surge to $14.35. The 52-week peak is at $14.98 and will be back in play on closes above the latter. Rising support is at $14.25-$14.


Wendy’s (WEN, $15.64, down $0.05)

WEN August 16 calls (WEN170818C00016000, $0.45, flat)

Entry Price: $0.45 (7/12/2017)
Exit Target: $0.90
Return: 0%
Stop Target: None

Action: Support is at $15.50-$15.25 with Thursday’s low reaching $15.51. Resistance remains at $15.75-$16.


Bank of America (BAC, $24.62, up $0.27)

BAC August 25 calls (BAC170818C00025000, $0.55, up $0.10)

Entry Price: $0.75 (7/3/2017)
Exit Target: $1.50
Return: -27%
Stop Target: None

Action: Shares traded up to $24.63 into the closing bell. Lower resistance at $24.75-$25 held. Support is trying to move up to $24.50-$24.25.


AT&T (T, $36.21, down $0.62)

T August 37 puts (T170818P00037000, $1.20, up $0.35)

Entry Price: $0.78 (6/29/2017)
Exit Target: $1.60
Return: 54%
Stop Target: 80 cents, raise to $1.05 (Stop Limit)

Action: Raise the Stop Limit from 80 cents to $1.05 to further protect profits.

Shares bottomed at $36.19 on Thursday and nearly took out the 52-week low of $36.10. A close below $36 appears imminent for a continued backtest to multiyear support at $35.50-$35. Resistance has moved down to $36.50-$36.75.


TherapeuticsMD (TXMD, $5.57, up $0.57)

TXMD August 7.50 calls (TXMD170818C00007500, $0.45, up $0.05)

Entry Price: $0.50 (6/22/2017)
Exit Target: $1.00
Return: -10%
Stop Target: None

Action: Upper resistance at $5.25-$5.50 and the 100-day moving average was cleared into the close on the surge to $5.64. The next hurdles are at $5.75 and the 200-day moving average with a move above the latter likely leading to a breakout between $6-$7. Support is trying to move up to $5.25-$5.


iPath S&P 500 VIX Futures (VXX, 12.23, down 0.16)

VXX August 14 calls (VXX170818C00014000, $0.50, down $0.05)

Entry Price: $1.20 (6/15/2017)
Exit Target: $2.40
Return: -58%
Stop Target: None

Action: Upper support at 12.25-12 was breached on the pullback to 12.20. Resistance is at 12.50-12.75.