Pre-Market Update for 11/17/2017

Nasdaq Triggers Fresh All-Time High

9:00am (EST)

The market showed strength from the start of Thursday’s open with Wall Street looking for more clarity, and the passage, of the tax bill by the House. The bill still needs approval by the Senate but the news was clearly a relief as the Nasdaq surged to an all-time peak north of 6,800. The Dow and S&P 500 snapped 2-session slides and are back within a stone’s throw of record highs after advancing 0.8%. The Russell 2000 had the biggest snapback after rallying 1.6% to clear a strong up-trending 50-day moving average.

Technology and Consumer Staples were the strongest sectors after jumping 1.4%. Materials and Health Care gained 1.2% and 1%, respectively. Utilities and Energy were the only laggards with the sectors giving back 0.4% and 0.3%.

Federal Reserve Bank of Cleveland president, Loretta Mester, was quiet on Fed policy but said analysts are starting to see inflation moving gradually back up when answering questions. She added there is good reason to believe inflation will be near 2% and that a gradual path remains the appropriate one for policy.

Dallas Fed’s Robert Kaplan said the balance sheet unwinding began when the Fed thought it was unlikely to return to zero interest rates. He’s confident in economic growth, since household leverage has fallen, expecting 2% plus growth next year. He also expects more slack to come out of the labor sector, but if the unemployment rate rises that could be a sign of impending recession.

Kaplan went on to add he endorses reviewing Fed governance, frameworks, targets and small bank supervision, as any organization needs to make changes. He sees some low volatility regarding the Volcker Rule and he would welcome a review of it, while stress tests and capital requirements for big banks are not hurting economic growth.

The Russell 2000 ETF (IWM) made a key reversal off it recent lows after making an intraday push to $148.40. I warned of a continued backtest earlier this month towards $145-$144 and the late September breakout above these levels if $146-$145.75 failed to hold. Wednesday’s low tapped $144.50 before yesterday’s 1.6% bounce.

RSI held late August support near the 40 level before today’s surge back above 50. Continued closes above this level would be a slightly bullish sign for another run towards 60-70 on continued momentum.


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.


Bank of America (BAC, $26.76, down $0.03)

BAC January 28 calls (BAC180119C00028000, $0.59, down $0.02)

Entry Price: $0.63 (11/16/2017)
Exit Target: $1.25
Return: -8%
Stop Target: None

Action: Support is at $26.50-$26.25. Resistance is at $26.


Rambus (RMBS, $14.72, up $0.23)

RMBS January 15 calls (RMBS180119C00015000, $0.40, up $0.05)

Entry Price: $0.35 (11/16/2017)
Exit Target: $0.70
Return: 14%
Stop Target: None

Action: Resistance is at $14.75-$15 with Thursday’s peak reaching $14.82. The recent 52-week high is at $14.90.


TiVo (TIVO, $17.70, up $1.25)

January 20 calls (TIVO180119C00020000, $0.50, up $0.10)

Entry Price: $0.60 (10/31/2017)
Exit Target: $1.20
Return: -12%
Stop Target: None

Action: Fresh resistance is at $17.75-$18. Support is at $17.50-$17.25.


Limelight Networks (LLNW, $5.85, up $0.10)

LLNW ‪December 4‬ calls (LLNW171215C00004000, $1.90, up $0.05)

Entry Price: $0.37 (9/21/2017)
Exit Target: $2.50 (Limit Order on half at $2.50)
Return: 418%
Stop Target: $1.70 (Stop Limit)

Action: Resistance is at $6-$6.10. Support is at $5.80-$5.75.


TherapeuticsMD (TXMD, $5.90, down $0.07)

TXMD December 7.50 calls (TXMD171215C00007500, $0.20, flat)

Entry Price: $0.95 (8/17/2017)
Exit Target: $1.90
Return: -78%
Stop Target: None

Action: Resistance is at $6-$6.25. Support is at $5.75-$5.50.