Mid-Market Update for 8/17/2017

Fed Minutes Review/ Profit Alert (DDD)/ New Trade (TXMD)

12:50pm (EST)

FOMC minutes showed most members still expect inflation to pick up over the medium term while preferring to defer the announced balance sheet unwinding until the upcoming September 19th-20th meeting. Some participants believed there was room for the FOMC to be patient on further rate hikes while others saw inflation moving on a clear path toward the 2% target and were concerned about the effect of a tighter labor market.

The bank had signaled it would raise its benchmark fed-funds rate one more time this year, but the surprising slowdown in inflation may have forced the FOMC to reconsider. On the appropriate pace of normalization of the funds rate, the FOMC fell back to acknowledging it would depend on how financial conditions evolved. As a result, a majority of investors now believe the Fed will hold off until early 2018.

Given today’s market losses, the Fed minutes could be the headline blame but I’ve been covering the weakness in the small-caps as a factor to watch to see if momentum would hold up. I prefer technical analysis instead of pinning reasons to why the market went up or down but headlines do play a role. Political and geopolitical events also play a role in the direction of the market but those are two subjects I try to avoid writing about – as much as possible.

The good news is volatility is back and that means more trading opportunities. The Dow is declining 138 points to 21,886 while the S&P 500 is down 20 points to 2,447. The Nasdaq is off 70 points to 6,274 and the Russell 2000 is lower by 7 points to 1,375.

I have a Profit Alert for DDD and a New Trade on TXMD.


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.

New Trade!

TherapeuticsMD (TXMD, $6.55, up $0.61)

Buy to Open TXMD December 7.50 calls (TXMD171215C00007500, $0.95, up $0.30)

Action: I like these call options at current levels and you can use a Limit Order up to $1.15 to get the best fills. These are the TXMD December 7.50 call options that expire on December 15th, 2017. I will provide the parameters of the trade in tomorrow’s update.


Current Trades

Intel (INTC, $35.46, down $0.35)

INTC October 37 calls (INTC171020C00037000, $0.40, down $0.08)

Entry Price: $0.53 (8/15/2017)
Exit Target: $1.10
Return: -23%
Stop Target: None

Action: Support is at $35.50-$35.25. Resistance is at $35.75-$36.


TiVo (TIVO, $18.10, down $0.40)

TIVO October 20 calls (TIVO171020C00020000, $0.60, down $0.05)

Entry Price: $0.70 (8/8/2017)
Exit Target: $1.40
Return: -13%
Stop Target: None

Action: Support is at $18-$17.75. Resistance is at $18.50-$18.75.


3D Systems (DDD, $12.59, up $0.04)

August 16 puts (DDD170818P00016000, $3.40, down $0.10)

Entry Price: $0.55 (8/2/2017)
Exit Target: $4 (Limit Order) (closed half @ $1.10 on 8/3/2017)
Return: 300% ($2.30 current avg. closing price)
Stop Target: $3.40 (Stop Limit)

Action: The Stop Limit has tripped on today’s pullback on the other half of the trade.