MomentumOptions.com Pre-Market Update for 10/27/2017
Tech Struggles, Holds Support
The market somewhat rebounded on Thursday and on the busiest day for 3Q earnings with a number of major Tech companies announcing after the close. The Dow was led my the financial stocks and came within 26 points of setting a fresh all-time high. The S&P 500 reclaimed the 2,560 level while coming within 11 points of another record high. The Russell 2000 held positive territory throughout the session but failed to hold the 1,500 level. Meanwhile, the Nasdaq struggled after trading on both sides of the ledger while closing slightly lower while holding the 6,550 level.
The Dow gained 71 points, or 0.3%, to end at 23,400. The blue-chips made a run to 23,459 shortly after the open while holding green throughout the session. Lower resistance at 23,500-23,550 held. Support is at 23,200-23,100 with risk to 23,000-22,800 on a move below the latter.
The S&P 500 added 3 points, or 0.1%, to finish at 2,560. The index also traded in positive territory throughout Thursday while tapping a high of 2,567 intraday. Lower resistance at 2,570-2,575 stood strong. Support remains at 2,560-2,550 with a close below 2,540 a bearish development.
The Nasdaq slipped 7 points, or 0.1%, to settle at 6,556. Tech opened higher but tested a low of 6,550 shortly after the opening bell. Upper support at 6,550-6,500 held with risk to 6,450 and the 50-day moving average on a move below the latter. Lower resistance at 6,600-6,625 easily held on the rebound to 6,582 afterwards.
The Russell 2000 was up 4 points, or 0.3%, to close at 1,497. The small-caps also held green while peaking at 1,501. Lower resistance at 1,500-1,510 was cleared but a level that failed to hold. Support is at 1,485-1,480.
The S&P 500 Volatility Index ($VIX, 11.30, up 0.07) traded to a low of 10.t0 with upper support at 10.50-10 holding. Lower resistance at 11.50-12.50 was breached ahead of the closing bell with the high kissing 11.81. A close above 13.50 ahead of the weekend would be a bearish development.
I have two bullish trades I might get into during the Mid-Market Update as I expect next week could be bullish if the market appears as if it could close higher ahead of the weekend.
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, $12.27, up $0.23)
November 12 calls (F171117C00012000, $0.40, up $0. 10)
Entry Price: $0.45 (10/11/2017)
Exit Target: $0.90
Stop Target: None
Action: Upper resistance at $12.15-$12.20 on Thursday’s run to $12.34 with fresh hurdles at $12.50-$12.50. Rising support at $12.15-$12.10.
Limelight Networks (LLNW, $4.90, up $0.02)
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)
Stop Target: 75 cents (Stop Limit)
Action: Resistance is at $5-$5.25 with yesterday’s peak reaching $4.98. Support is at $4.75-$4.70 on a close below $4.90.
TherapeuticsMD (TXMD, $4.57, down $0.36)
TXMD December 7.50 calls (TXMD171215C00007500, $0.20, down $0.05)
Entry Price: $0.95 (8/17/2017)
Exit Target: $1.90
Stop Target: None
Action: Support is at $4.50. Resistance is at $4.70-$4.75.