MomentumOptions.com Pre-Market Update for 11/10/2017
Bears Growl Over Tax Uncertainty/ Trade Alert (F)
The market closed lower across the board for the first time in eight trading sessions following uncertainty over the Senate tax bill which proposed delaying the long-sought corporate tax cuts until 2019. The Dow and S&P 500 held near-term support from mid-October on the intraday lows while recouping half their losses into the close.
The Nasdaq held beginning of the month support after taking the hardest hit and briefly falling below the 6,700 level. Meanwhile, the Russell 2000 held 1,460 on its low and a level that served as prior resistance from the late September breakout.
Industrials were the weakest sector after posting a decline of 1.2% followed by Materials and Technology which fell 0.9% and 0.8%, respectively. Energy showed the most sector strength following its 0.3% gain while Consumer Discretionary rose 0.2%.
The Russell 3000 Index (RUA) pulled back off Tuesday’s all-time high north of 1,537 following today’s backtest to 1,517. Late October support at 1,520-1,515 held with a move below 1,510 likely leading to additional weakness to 1,500 and an up trending 50-day moving average. Resistance is at 1,535-1,540 with closes back above 1,530 being a continued bullish development. RSI is in a downtrend with risk to 50 following the volatility but is trying to hold September support near 60.
I wanted to point out the Russell 3000 this morning given the weakness in the Russell 2000. This divergence has caused some market confusion as the market pros prepare for a selloff. However, I also pointed out the difference in the Dow and the Dow Transports in recent weeks.
The charts still look super bullish, in most cases, and there will be plenty of time to get short for an eventual 10%-20% pullback when there is weakness across the board.
I apologize for NOT sending a Mid-Market update yesterday as I was in the zone studying up to 5 New Trades. If current support can hold, I want to start building fresh positions into January and December. I usually don’t like buying options on a Friday but Monday’s have been bullish in recent weeks.
Momentum Options Play List
Closed Momentum Options Trades for 2017: 50-21 (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.
TiVo (TIVO, $17.30, down $0.65)
January 20 calls (TIVO180119C00020000, $0.35, down $0.10)
Entry Price: $0.60 (10/31/2017)
Exit Target: $1.20
Stop Target: None
Action: Support is at $17.25-$17 following yesterday’s backtest to $17.25. Lowered resistance is at $17.50.
Ford (F, $12.04, down $0.02)
November 12 calls (F171117C00012000, $0.15, flat)
Entry Price: $0.45 (10/11/2017)
Exit Target: $0.90
Stop Target: 10 cents (Stop Limit)
Action: The Stop Limit at 10 cents triggered on the drop below $12 to $11.93 yesterday.
Limelight Networks (LLNW, $5.66, up $0.05)
LLNW December 4 calls (LLNW171215C00004000, $1.60, down $0.05)
Entry Price: $0.37 (9/21/2017)
Exit Target: $2.00 (Limit Order on half at $2)
Stop Target: $1.25, raise to $1.45 (Stop Limit)
Action: Raise the Stop Limit from $1.25 to $1.45.
Resistance is at $5.75-$6. Support is at $5.40-$5.35.
TherapeuticsMD (TXMD, $5.61, up $0.15)
TXMD December 7.50 calls (TXMD171215C00007500, $0.20, flat)
Entry Price: $0.95 (8/17/2017)
Exit Target: $1.90
Stop Target: None
Action: Support is at $5.25. Resistance is at $5.75.