Pre-Market Update for 10/25/2017

Dow Surges on Earnings

8:00am (EST)

The market opened higher following solid earnings reports from several members of the Dow that propelled the index to another fresh intraday and closing all-time high. The S&P 500 and Nasdaq settled with slight gains but stalled in their efforts in making new record highs with the latter failing the 6,600 level. The Russell 2000 also showed some strength after recovering the 1,500 level.

The Dow jumped 167 points, or 0.4%, to settle at 23,441. The blue-chips held positive territory throughout the session while trading to a fresh all-time of 23,485. Lower resistance at 23,500-23,550 held with a move above the latter being a continued bullish development. Support remains at 23,200-23,100 with backup help at 23,000-22,800.

The S&P 500 added 4 points, or 0.2%, to close at 2,569. The index also held green throughout Tuesday while reaching a peak of 2,572. A move above 2,575 keeps resistance at 2,600-2,625 in play. Support remains at 2,560-2,550 with a move below 2,540 signaling a short-term top.

The Nasdaq advanced 11 points, or 0.2%, to end at 6,598. Tech tested a morning low of 6,582 with upper support at 6,575-6,550 holding. A move below the latter would be a bearish development. Resistance remains at 6,625-6,650.

The Russell 2000 gained nearly 3 points, or 0.2%, to finish at 1,500. The small-caps also held positive territory throughout the day while trading to a high of 1,505. Resistance at 1,515-1,525 continues to hold. The close on upper support 1,500-1,490 was a slightly bullish signal but there is still risk to 1,475-1,470 on a move below the latter.

The S&P 500 Volatility Index ($VIX, 11.16, up 0.09) tested a low of 10.28 on the open with support at 9.75-9.50 holding. Lower resistance at 11.50-12.50 held on the session high into the closing bell.

I have raised the Stop Limit on LLNW so adjust your trading accounts accordingly.


Momentum Options Play List

Closed Momentum Options Trades for 2017: 50-20 (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.


Ford (F, $12.19, up $0.15)

November 12 calls (F171117C00012000, $0.40, up $0.05)

Entry Price: $0.45 (10/11/2017)
Exit Target: $0.90
Return: -11%
Stop Target: None

Action: Shares traded to a high of $12.26 before closing shy of resistance at $12.20-$12.25. Support remains at $12.10-$12.


Limelight Networks (LLNW, $4.80, down $0.13)

LLNW ‪December 4‬ calls (LLNW171215C00004000, $0.95, down $0.10)

Entry Price: $0.37 (9/21/2017)
Exit Target: $1.20 (Limit Order on half at $1.20)
Return: 128%
Stop Target: 50 cents, raise to 75 cents (Stop Limit)

Action: Raise the Stop Limit from 50 cents to 75 cents. Yesterday’s low reached $4.72 with support at $4.75-$4.70 holding. Resistance is at $5-$5.25.


TherapeuticsMD (TXMD, $5.00, up $0.06)

TXMD December 7.50 calls (TXMD171215C00007500, $0.25, flat)

Entry Price: $0.95 (8/17/2017)
Exit Target: $1.90
Return: -72%
Stop Target: None

Action: Resistance is at $5.25. Support is at $5-$4.90.