Pre-Market Update for 7/20/2017

Small-Caps Shine on Run to Record Highs

8:00am (EST)

The bulls continued their run towards records highs with the S&P 500, Nasdaq and Russell 2000 reaching fresh intraday peaks into the closing bell. The Dow lagged but also edged higher. Small-caps led Wednesday’s rally with Financial stocks still struggling despite continued solid earnings from the sector. Oil prices were higher after a larger than expected draw in inventory over the past week.

The Dow gained 66 points, or 0.3%, to finish at 21,640. The blue-chips opened slightly lower at 21,569 while testing a low of 21,565. Rising support at 21,600-21,550 held with backup help at 21,400-21,350. The steady run to 21,624 failed lower resistance at 21,675-21,700 with a move above the latter leading to a possible run towards 21,800-22,000.

The S&P 500 soared 13 points, or 0.5%, to close at 2,473. The index traded in positive territory throughout the session while reaching an all-time high into the closing bell. Fresh resistance is at 2,475-2,500. Support remains at 2,450-2,445.

The Nasdaq advanced 40 points, or 0.6%, to settle at 6,385. Tech opened at a fresh lifetime high of 6,363 while reaching an intraday peak of 6,387. Continued closes above 6,350-6,375 keeps fresh resistance at 6,450-6,500 in play. Support is trying to move up to 6,325-6,300.

The Russell 2000 rallied 14 points, or 1%, to end at 1,441. The small-caps also held green throughout Wednesday’s session and closed at the session high. The move above upper resistance at 1,435-1,440 and fresh lifetime high gets 1,450-1,460 in the mix. Support is at 1,425-1,420 if 1,435 fails to hold.

The S&P 500 Volatility Index ($VIX, 9.95, down 0.xx) held support at 9.50 on the dip to 9.58 shortly after the opening bell. Resistance at 10-10.50 held on the intraday bounce to 9.94. A move above 10.75-11 would be a bearish development.

From desk to press, futures look like this: Dow (-3); S&P 500 (-1); Nasdaq 100 (+5).

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, $14.59, up $0.14)

CY August 15 calls (CY170818C00015000, $0.55, flat)

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

Action: Lower resistance at $14.50-$14.75 was cleared on Wednesday’s run to $14.71. Rising support is at $14.50-$14.25.


Wendy’s (WEN, $15.65, up $0.21)

WEN August 16 calls (WEN170818C00016000, $0.45, up $0.05)

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

Action: Resistance is at $15.75-$16 with yesterday’s high tapping $15.73. Support is at $15.50-$15.25.


Bank of America (BAC, $24.06, up $0.16)

BAC August 25 calls (BAC170818C00025000, $0.20, flat)

Entry Price: $0.75 (7/3/2017)
Exit Target: $1.50
Return: -73%
Stop Target: 10 cents (Stop Limit)

Action: Lower resistance at $24-$24.25 was cleared on Wednesday’s trip to $24.20. Support is at $23.75-$23.50.


AT&T (T, $36.13, up $0.14)

T August 37 puts (T170818P00037000, $1.25, down $0.10)

Entry Price: $0.78 (6/29/2017)
Exit Target: $1.60
Return: 60%
Stop Target: $1.20 (Stop Limit)

Action: Lower resistance at $36-$36.25 was cleared on the close at session highs. Support is at $35.75-$35.50


TherapeuticsMD (TXMD, $5.34, up $0.08)

TXMD August 7.50 calls (TXMD170818C00007500, $0.25, flat)

Entry Price: $0.50 (6/22/2017)
Exit Target: $1.00
Return: -50%
Stop Target: None

Action: Resistance is at $5.50. Support is at $5.25-$5.


iPath S&P 500 VIX Futures (VXX, 11.41, down 0.13)

VXX August 14 calls (VXX170818C00014000, $0.30, flat)

Entry Price: $1.20 (6/15/2017)
Exit Target: $2.40
Return: -75%
Stop Target: None

Action: Support is at 11.50-11.25. Resistance is at 11.75-12.