MomentumOptions.com Pre-Market Update for 10/26/2017
Bears Growl, Bulls Hold Support
8:00am (EST)
The market was weak throughout Wednesday’s session with the Dow posting its worst decline since early September. The Nasdaq led the pullback but held 6,550 and a key level of support. The S&P also showed losses but held near-term support at 2,550. Meanwhile, the Russell 2000 fell to a fresh low for the month after falling below 1,490 but a level that held into the closing bell.
The Dow tumbled 112 points, or 0.5%, to close at 23,329. The blue-chips traded to a high of 23,451 on the open with lower resistance at 23,500-23,550 holding. The 10-point gains quickly evaporated with the midday low tapping 23,251. Upper support at 23,200-23,100 held with risk to 23,000-22,800 on a move below the latter.
The S&P 500 slumped 12 points, or 0.5%, to end at 2,557. The index traded in negative territory throughout the session while bottoming at 2,544 intraday. Support at 2,560-2,550 was split with a move below 2,540 signaling a short-term top. Wednesday’s low reached 2,544. Lowered resistance is now at 2,570-2,575.
The Nasdaq stumbled 34 points, or 0.5%, to finish at 6,563. Tech kissed 6,600 at the start of trading with lowered resistance at 6,600-6,625 holding. Lower support at 6,575-6,550 was stretched following the spike down to 6,517. A close below 6,500 could lead to panic selling down to 6,450 and the 50-day moving average.
The Russell 2000 fell 7 points, or 0.5%, to settle at 1,493. The small-caps also failed positive territory after opening just above 1,500 but a level that failed to hold minutes into trading. The low tapped 1,482 with backup support at 1,475-1,470 coming into play. Resistance is at 1,500-1,510.
The S&P 500 Volatility Index ($VIX, 11.23, up 0.07) stayed elevated throughout the session with the high reaching 13.20. Resistance at 11.50-12.50 held into the closing bell with a move above 13.50 leading to possible panic selling. Rising support is at 10.50-10.
It remains to been seen if yesterday’s pullback was the start of a continued pullback or if support levels were simply stretched.
From desk to press, futures look like this: Dow (xx); S&P 500 (xx); Nasdaq 100 (xx).
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, $12.04, down $0.15)
November 12 calls (F171117C00012000, $0.30, down $0.10)
Entry Price: $0.45 (10/11/2017)
Exit Target: $0.90
Return: -33%
Stop Target: None
Action: Support at $12.10-$12 was breached following yesterday’s backtest to $11.97. Lowered resistance is at $12.15-$12.20.
Limelight Networks (LLNW, $4.88, up $0.08)
LLNW December 4 calls (LLNW171215C00004000, $0.95, flat)
Entry Price: $0.37 (9/21/2017)
Exit Target: $1.20 (Limit Order on half at $1.20)
Return: 128%
Stop Target: 75 cents (Stop Limit)
Action: Lower resistance at $5-$5.25 held on Wednesday’s run to $4.92. Support is at $4.75-$4.70 on a close below $4.90.
TherapeuticsMD (TXMD, $4.93, down $0.07)
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: Support is at $4.90 followed by $4.75-$4.70. Resistance is at $5-$5.10.
