Mid-Market Update for 7/21/2017

July Option Expiration Day Typically Bearish/ New Trade (IMAX)

2:40pm (EST)

July option expiration day has been bearish over the past 16 years with the Dow trading lower in 10 of them. The Dow is also trying to close out its fourth-straight higher Friday and is typically a bullish signal as shows money is still moving into the market ahead of the weekend.

Earnings after last night’s closing bell were highlighted by Microsoft’s blowout quarter. The company topped expectations by 27 cents after reporting a profit of $0.98 a share on revenue of $24.7 billion. Wall Street had been expecting earnings of $0.71 a share on revenue of $24.27 billion.

Shares have been in a strong uptrend following the breakout above the $70 level and the 50-day moving average.

The impressive results from Microsoft hasn’t given Tech the momentum it needs as the overall market is slightly lower. The Dow is down 45 points to 21,566 while the S&P 500 is slipping 3 points to 2,470. The Nasdaq is off 12 points to 6,377 and the Russell 2000 is declining 6 points to 1,436.

I do have a New Trade I want to get us into so let’s go check the tape.


Momentum Options Play List

Closed Momentum Options Trades for 2017: 40-15 (73%). 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.

New Trade!

Imax (IMAX, $21.35, up $0.15)

Buy to Open IMAX August 21 puts (IMAX170818P00021000, $0.78, down $0.28)

Action: I like these put options at current levels and you can use a Limit Order up to 90 cents to get the best fills. These are the regular IMAX August 21 puts that expire on August 18th, 2017. I will provide the parameters of the trade in Monday’s Pre-Market update.


Current Trades

Cypress Semiconductor (CY, $14.60, down $0.32)

CY August 15 calls (CY170818C00015000, $0.55, down $0.10)

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

Action: Fresh resistance at $15-$15.25. Support is at $14.75-$14.50.


Wendy’s (WEN, $15.86, up $0.02)

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: Resistance at $16-$16.25. Support is trying to move up to $15.75-$15.50.


Bank of America (BAC, $23.76, down $0.18)

BAC August 25 calls (BAC170818C00025000, $0.17, down $0.03)

Entry Price: $0.75 (7/3/2017)
Exit Target: $1.50
Return: -87%
Stop Target: 10 cents (Stop Limit)

Action: The Stop Limit at 10 cents has tripped on today’s pullback.


TherapeuticsMD (TXMD, $5.53, up $0.16)

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, 11.31, down 0.03)

VXX August 14 calls (VXX170818C00014000, $0.25, flat)

Entry Price: $1.20 (6/15/2017)
Exit Target: $2.40
Return: -79%
Stop Target: 10 cents (Stop Limit)

Action: Support is at 11.25-11. Resistance is at 11.50-11.75.