MomentumOptions.com Pre-Market Update for 8/11/2017
Support Gets Stretched
The market traded lower for the third-straight session and a streak last reached back in April. Tech and the small-caps led the way lower with the Nasdaq falling below its 50-day moving average for the first time since early July. The Russell 2000 continued its free fall towards its 200-day moving average and a technical setup last visited ahead of the 2016 November election. Volatility is back in play as traders prepare for Friday and the decision to stay long or short ahead of the weekend.
The Dow tanked 204 points, or 0.9%, to end at 21,844. The blue-chips opened below the 22,000 level at 21,988 while testing a low of 21,843 into the closing bell. Lower support at 22,000-21,800held with risk to 21,600-21,550 on continued weakness. Lowered resistance is at 22,000-22,100.
The S&P 500 sank 35 points, or 1.5%, to finish at 2,438. The index closed a half-point off its low of 2,437 with lower support at 2,450-2,440 and the 50-day moving average failing to hold. There is risk to 2,425-2,420 on continued weakness. Resistance is at 2,450-2,460.
The Nasdaq stumbled 135 points, or 2.1%, to close at 6,216. Tech went out 2 points off its low of 6,214 to retest prior July support at 6,200. A move below this level could lead to a continued backtest to 6,150-6,100 and the 100-day moving average. Fresh resistance is at 6,250-6,300 and the 50-day moving average.
The Russell 2000 tumbled 24 points, or 1.8%, to settle at 1,372. The small-caps closed at the session low with backup support is at 1,375-1,370 and the 200-day moving average holding. There is risk to 1,360-1,355 on continued weakness. Lowered resistance is at 1,395-1,400 and the 100-day moving average.
The S&P 500 Volatility Index ($VIX, 16.04, up 4.93) zoomed 44% while testing a high of 16.17 ahead of the close. The close above 14.50-15 and fresh support was slightly bearish. There is risk to resistance at 17.50-20 ahead of the weekend on a move above the April highs of 16.22 and 16.28 that was set on back-to-back sessions.
From desk to press, futures look like this: Dow (-35); S&P 500 (-5); Nasdaq 100 (-25).
Momentum Options Play List
Closed Momentum Options Trades for 2017: 43-18 (70%). 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.
TiVo (TIVO, $18.20, down $0.10)
TIVO October 20 calls (TIVO171020C00020000, $0.60, down $0.10)
Entry Price: $0.70 (8/8/2017)
Exit Target: $1.40
Stop Target: None
Action: Support at $18 held with Thursday’s low reaching $18.10. Lowered resistance is at $18.50-$18.75.
3D Systems (DDD, $12.60, down $0.23)
August 16 puts (DDD170818P00016000, $3.40, up $0.30)
Entry Price: $0.55 (8/2/2017)
Exit Target: $4 (Limit Order) (closed half @ $1.10 on 8/3/2017)
Return: 309% ($2.30 current avg. closing price)
Stop Target: $2.80 (Stop Limit)
Action: Support at $12.50-$12.25 was split with yesterday’s low reaching $12.37. Resistance is at $12.75-$13.
TherapeuticsMD (TXMD, $5.68, up $0.11)
TXMD August 7.50 calls (TXMD170818C00007500, $0.10, flat)
Entry Price: $0.50 (6/22/2017)
Exit Target: $1.00
Stop Target: None
Action: Resistance is at $5.75 with Thursday’s high tapping $5.80. Support is at $5.50-$5.25.