MomentumOptions.com Pre-Market Update for 8/16/2017
Retail Earnings Stall Momentum
The market opened higher but struggled to extend the rally from the past two days as the major indexes finished mixed. The Retail sector was punished following a number of disappointing earnings that stalled overall momentum. Small-caps were the weakest link and continued to struggle with resistance while the broader market held key support levels following narrow trading ranges.
The Dow added 5 points, or 0.02%, to end a shade under 21,999. The blue-chips traded to a high of 22,029 shortly after the open to clear lower resistance at 22,000-22,100. The backtest to 21,971 intraday held support at 21,800.
with 21,600-21,550 serving as backup.
The S&P 500 slipped a point, or 0.05%, to finish at 2,464. The index opened just below its session high of 2,468 but failed lower resistance at 2,470-2,475. The rest of the session was choppy with the midday low reaching 2,461. Support at 2,460 held with risk to 2,450-2,445 on a move below this level.
The Nasdaq dipped 7 points, or 0.1%, to close at 6,333. Tech made a run to 6,350 on the open to test lower resistance at 6,350-6,400 before fading. Support at 6,300-6,275 held the low of 6,324 shortly afterwards. The higher high and higher low than Monday’s action was a slightly bullish clue for the index.
The Russell 2000 dropped 11 points, or 0.8%, to settle at 1,383. The small-caps struggled for much of the session following a one-point pop to 1,395 at the start of trading. Lower resistance at 1,395-1,400 held before the tumble to 1,382 into the closing bell. Support at 1,380-1,375 held with a move below 1,370 being a bearish signal.
The S&P 500 Volatility Index ($VIX, 12.04, down 0.29) stayed deflated for much of the session aside from the slight rise to 12.37. Lower resistance at 12.50-13.50 held with a move above the latter a signal for another round of heightened volatility. Upper support at 11.50-11.25 came into play on the intraday low of 11.45.
From desk to press, futures look like this: Dow (+47); S&P 500 (+4); Nasdaq 100 (+14).
Momentum Options Play List
Closed Momentum Options Trades for 2017: 43-19 (69%). 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.
Intel (INTC, $36.00, down $0.34)
INTC October 37 calls (INTC171020C00037000, $0.59, down $0.12)
Entry Price: $0.53 (8/15/2017)
Exit Target: $1.10
Stop Target: None
Action: Set an Exit Target at $1.10.
Support at $35.75-$35.50 held with yesterday’s low reaching $35.81. Resistance is at $36.25-$36.50. A breakout towards $38-$40 could occur on another move past $36.75.
TiVo (TIVO, $18.30, down $0.20)
TIVO October 20 calls (TIVO171020C00020000, $0.65, flat)
Entry Price: $0.70 (8/8/2017)
Exit Target: $1.40
Stop Target: None
Action: Tuesday’s bottom reached $18.10. Support is at $18-$17.75. Resistance is at $18.50-$18.75.
3D Systems (DDD, $12.36, down $0.42)
August 16 puts (DDD170818P00016000, $3.60, up $0.40)
Entry Price: $0.55 (8/2/2017)
Exit Target: $4 (Limit Order) (closed half @ $1.10 on 8/3/2017)
Return: 312% ($2.35 current avg. closing price)
Stop Target: $3, raise to $3.40 (Stop Limit)
Action: Raise the Stop Limit from $3 to $3.40. These options expire this Friday. I will likely close the other half of the position on Thursday if the Limit Order or Stop Limit fails to trigger today.
Upper support at $12.50-$12.25 was breached with yesterday’s low reaching $12.28. Lowered resistance is at $12.50-$12.75.