Mid-Market Update for 8/8/2017

Lackluster Week as Earnings Cool/ Profit Alert (AA)/ New Trade (TIVO)

2:35pm (EST)

It’s been a lackluster day of trading with the bulls showing some momentum after a slow start. Economic news has been somewhat light with Fed speak taking some of the spotlight away from a slowing down earnings season.

Yesterday, St. Louis Fed’s James Bullard believes current rates are about appropriate for the near term. Bullard said he doesn’t believe that the unemployment rate will be enough to push inflation toward the central bank’s 2% target and the level of short-term interest rates is fine where it is for now.

Also on Monday, Minneapolis Fed’s Neel Kashkari said he hasn’t seen wages growing very quickly but that the economy is doing pretty well. He mentioned the largest U.S. banks are – still – too big to fail.

The Fed heads change their minds and flip-flop on topics as much as the talking heads do. However, the drama they create is watched by Wall Street like a daytime soap opera.

Turning our focus to the market, the Dow is up 6 points to 22,125 while the S&P 500 is adding a point to 2,482. The Nasdaq is gaining 15 points to 6,399 and the Russell 2000 is advancing 2 points to 1,416.

Although the headlines have been light, the action is picking up in our portfolio as I have a New Trade I want to get us into along with a Profit Alert for AA.


Momentum Options Play List

Closed Momentum Options Trades for 2017: 42-17 (71%). 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

TiVo (TIVO, $18.72, down $0.18)

Buy to Open TIVO October 20 calls (TIVO171020C00020000, $0.70, up $0.10)

Action: I like these call options at current levels and you can use a Limit Order up to 85 cents to get the best fills. These are the regular TIVO October 20 calls that expire on October 20th, 2017. I will provide the parameters of the trade in today’s midday update


Current Trades

3D Systems (DDD, $12.79, down $0.17)

August 16 puts (DDD170818P00016000, $3.00, flat)

Entry Price: $0.55 (8/2/2017)
Exit Target: $4 (Limit Order) (closed half @ $1.10 on 8/3/2017)
Return: 273% ($2.05 current avg. closing price)
Stop Target: $2.50 (Stop Limit)

Action: Support is at $12.75-$12.50. Resistance is at $13-$13.25.


Alcoa (AA, $40.04, up $2.05)

AA August 39 calls (AA170818C00039000, $1.65, up $1.20)

Entry Price: $0.55 (7/25/2017)
Exit Target: 65 cents (Limit Order)
Return: 200%
Stop Target: 20 cents (Stop Limit)

Action: Close the trade at current levels if you haven’t done so already. The options zoomed past the Limit Order and have traded up to $1.80 today.


Wendy’s (WEN, $15.35, down $0.12)

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: Support is at $15.25-$15. Resistance is at $15.50-$15.75.


TherapeuticsMD (TXMD, $5.44, up $0.08)

TXMD August 7.50 calls (TXMD170818C00007500, $0.10, flat)

Entry Price: $0.50 (6/22/2017)
Exit Target: $1.00
Return: -80%
Stop Target: None

Action: Resistance is at $5.50-$5.75. Support is at $5.25-$5.