Mid-Market Update for 8/30/2017

Money Moving Out of the Market

1:30pm (EST)

Outflows from the U.S. markets continues to reach a fever pitch as investors have pulled $30 billion from stock funds over the last 10 weeks. The 10-straight weeks of withdrawals is the most since 2004 with internal positioning changes also indicating investors are becoming more defensive.

Emerging markets along with European and Japanese stocks have benefitted with $36 billion in inflows over the last 10 weeks. While the rotation is not too surprising, it comes with the S&P 500 just 2% off its all-time peak of 2,490.

Coming into the year, Wall Street predicted continued underperformance in emerging markets due to President’s Trump’s trade policies and a rising U.S. dollar. The president’s policies haven’t proven to be as detrimental to trade as initially feared, and the lower dollar has provided some relief for battered emerging markets.

A stabilization in commodity markets, which are a key income source for many emerging markets, has also the rotation out of U.S. markets into overseas equities. This improved backdrop could help corporate earnings for emerging markets accelerate by over 25% in 2017.

The news that money is moving out of the market shows most investors DON’T know how to play a down market and are worried about a pullback. While understandable, I often say if you don’t know how to play the downside, or use put options, it eliminates half your trading playbook. The only frustrating action is trading ranges.

Heading into the second half of trading, the Dow is up 27 points to 21,892 while the S&P 500 is gaining 10 points to 2,456. The Nasdaq is higher by 56 points to 6,358 and the Russell 2000 is advancing 6 points to 1,390.

I have updated our current trades so let’s go check the tape.


Momentum Options Play List

Closed Momentum Options Trades for 2017: 44-19 (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.


Amicus Therapeutics (FOLD, $14.02, up $0.16)

FOLD October 15 calls (FOLD171020C00015000, $1.35, flat)

Entry Price: $1.05 (8/25/2017)
Exit Target: $2.10
Return: 31%
Stop Target: None

Action: Fresh resistance at $14.25-$14.50. Support is at $13.50-$13.25.


TherapeuticsMD (TXMD, $6.00, flat)

TXMD December 7.50 calls (TXMD171215C00007500, $0.65, flat)

Entry Price: $0.95 (8/17/2017)
Exit Target: $1.90
Return: -31%
Stop Target: None

Action: Support is at $6-$5.75. Resistance is at $6-$6.25.


Intel (INTC, $34.70, down $0.03)

INTC October 37 calls (INTC171020C00037000, $0.12, flat)

Entry Price: $0.53 (8/15/2017)
Exit Target: $1.10
Return: -78%
Stop Target: 10 cents (Stop Limit)

Action: Support is at $34.50-$34.25. Resistance is at $34.75-$35.


TiVo (TIVO, $18.30, down $0.20)

TIVO October 20 calls (TIVO171020C00020000, $0.35, flat)

Entry Price: $0.70 (8/8/2017)
Exit Target: $1.40
Return: -50%
Stop Target: None

Action: Support is at $18.25-$18. Resistance is at $18.75-$19.