Pre-Market Update for 7/27/2017

Fed Stands Pat

8:00am (EST)

The market traded higher throughout Wednesday with the major indexes, excluding the small-caps hitting fresh all-time highs ahead of the Fed news. The action afterwards was a little choppy as the broader market pulled back of its peak with the small-caps adding to their losses on news interest rates remained unchanged.

The Dow gained 97 points, or 0.5%, to finish at 21,711. The blue-chips opened at a record high of 21,690 while reaching a peak of 21,742 intraday. The move above upper resistance at 21,675-21,700 gets 21,800-22,000 firmly in the mix. Rising support is at 21,600-21,550.

The S&P 500 advanced less than a point, or 0.03%, to close at 2,477. The index traded to an all-time high of 2,481 shortly after the open to keep resistance at 2,500 in play. The fade to 2,474.95 held prior lower resistance at 2,475. Support is at 2,460-2,450 on a move below 2,470.

The Nasdaq added 10 points, or 0.2%, to settle at 6,422. Tech held positive throughout the session while kissing a fresh lifetime high of 6,432. Lower resistance at 6,450-6,500 held. Support remains at 6,375-6,350 with a move below 6,300 being a bearish development.

The Russell 2000 fell 8 points, or 0.6%, to end at 1,442. The small-caps tested a high of 1,452 on the open but missed an all-time high by 8/10th’s of a point. Upper resistance at 1,445-1,450 was cleared for the second-straight session but the rest of the action afterwards was in the red. Fresh support at 1,435-1,430 held on the backtest to 1,441.

The S&P 500 Volatility Index ($VIX, 9.60, up 0.16) traded to another historic low of 8.84 to crack lower support at 9.25-9. I have talked about the possibility of the 8’s coming into play but I’m not sure there will be any closes under 9 this month. There could be in August and where I’m expecting the summer rally to start fading. Resistance at 10-10.50 easily held after the slight pop to 9.66 after the Fed news.

From desk to press, futures look like this: Dow (+26); S&P 500 (+4); Nasdaq 100 (+33).


Momentum Options Play List

Closed Momentum Options Trades for 2017: 41-16 (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.


Alcoa (AA, $36.63, down $0.67)

AA August 39 calls (AA170818C00039000, $0.40, down $0.15)

Entry Price: $0.55 (7/25/2017)
Exit Target: $1.10
Return: -18%
Stop Target: None

Action: Support is at $36.50-$36.25 with yesterday’s low tapping $36.56. Lowered resistance is at $37-$37.25.


Imax (IMAX, $21.85, up $0.15)

IMAX August 21 puts (IMAX170818P00021000, $0.65, flat)

Entry Price: $0.78 (7/21/2017)
Exit Target: $1.60
Return: -17%
Stop Target: None

Action: Upper resistance at $21.75-$22 was cleared following the run to $22.10 into Wednesday’s closing bell. Support is at $21.50-$21.25.


Wendy’s (WEN, $15.83, down $0.12)

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

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

Action: Yesterday’s low reached $15.70. Support is at $15.75. Resistance is at $16-$16.25.


TherapeuticsMD (TXMD, $5.85, up $0.10)

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 $6-$6.25. Support is at $5.75-$5.50.


iPath S&P 500 VIX Futures (VXX, 11.09, up 0.03)

VXX August 14 calls (VXX170818C00014000, $0.15, flat)

Entry Price: $1.20 (6/15/2017)
Exit Target: $2.40
Return: -88%
Stop Target: 10 cents (Stop Limit)

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