Pre-Market Update for 8/3/2017

Small-Caps Close Below 50-Day Moving Average

8:00am (EST)

The market began the session higher, with the Dow continuing its run at all-time highs and surpassing 22,000 for the first time. The Nasdaq and S&P 500 show slight gains on the open, as well, thanks to Apple’s (AAPL) earnings results and surge to record highs. However, as the stock backed of its gains, Tech and the broader market moved into the red while making a backtest to support. The small-caps were the weakest link as they fell 1.1% after trading in negative territory throughout the session while closing below the 50-day moving average for the first time since late May.

The Dow climbed 52 points, or 0.2%, to close at 22,016. The blue-chips held positive territory throughout the session while reaching an all-time intraday high of 22,036. Upper resistance at 21,900-22,000 was cleared with fresh hurdles at 22,200-22,250. Support remains at 21,800-21,700.

The S&P 500 added a point, or 0.05%, to settle at 2,477. The index traded up to 2,480 on the open with lower resistance at 2,485-2,500 easily holding. Support at 2,460-2,450 was hardly challenged on the backtest to 2,466 but could come into play on continued weakness.

The Nasdaq slipped a third of a point, or 0.0%, to end at 6,362. Tech peaked at 6,394 on the open with lower resistance at 6,400-6,425 holding for the fourth-straight session. Upper support at 6,325-6,275 was breached on the intraday fade to 6,313. A move below 6,250 and the 50-day moving average would be a bearish development.

The Russell 2000 fell 15 points, or 1.1%, to finish at 1,412. The small-caps failed to trade into positive territory after opening a quarter-point lower at 1,428 while trading down to 1,408 intraday. Support at 1,410 held but the close below the 50-day moving average was a bearish development. Resistance is at 1,420-1,425.

The S&P 500 Volatility Index ($VIX, 10.30, up 0.21) tested a low of 9.80 to split support at 10-9.50 but levels that failed to hold. Lower resistance at 10.50-11.50 was cleared on the intraday pop to 10.81 and levels that held into the closing bell.

From desk to press, futures look like this: Dow (-17); S&P 500 (-3); Nasdaq 100 (-7).


Momentum Options Play List

Closed Momentum Options Trades for 2017: 42-17 (72xx%). 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.


3D Systems (DDD, $17.01, down $0.07)

August 16 puts (DDD170818P00016000, $0.60, up $0.07)

Entry Price: $0.55 (8/2/2017)
Exit Target: $1.10 (Limit Order on half)
Return: 9%
Stop Target: None

Action: The company reported earnings of $0.08 a share on revenue of $159.5 million after Wednesday’s close while analysts were looking for $0.12 a share on sales of $162.47 million.

Shares were down 13% and below $15 in after-hours trading, at one point, on the news. The options could open higher than the $1.10 Limit Order and this would be a bonus. While we could squeeze a few more nickels out on the open by raising it, I don’t want to get too fancy. I will update the trade shortly after the opening bell with a Stop Limit on the other half.


Alcoa (AA, $37.28, up $0.90)

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

Entry Price: $0.55 (7/25/2017)
Exit Target: $1.10
Return: -27%
Stop Target: None

Action: Shares traded to a high of $37.33 yesterday to clear upper resistance is at $36.50-$37. These levels will now try to serve as short-term support. Fresh hurdles are at $37.50-$37.75.


Wendy’s (WEN, $15.45, up $0.04)

WEN August 16 calls (WEN170818C00016000, $0.25, flat)

Entry Price: $0.45 (7/12/2017)
Exit Target: $0.90
Return: -44%
Stop Target: None

Action: Upper support at $15.25-$15 was stretched but held on yesterday’s dip to $15.21. Resistance is at $15.50-$15.75.


TherapeuticsMD (TXMD, $5.56, up $0.12)

TXMD August 7.50 calls (TXMD170818C00007500, $0.20, flat)

Entry Price: $0.50 (6/22/2017)
Exit Target: $1.00
Return: -60%
Stop Target: None

Action: Support at $5.25-$5 was split split on the dip to $5.15. Lower resistance at $5.50-$5.75 was cleared on the rebound to $5.58.