Pre-Market for 11/28/2017

Dow Closes Slightly Higher/ Profit Alert (RMBS)

8:00am (EST)

The market started the week by setting fresh all-time highs, excluding the Russell 2000, while closing mixed to end the session. The Dow reached a record peak just south of 23,639 while holding positive territory. The S&P 500 tapped 2,606 while closing above the 2,600 for the second-straight session after giving back a point.

The Nasdaq came with 3 points of clearing the 6,900 level but had its 4-session winning streak snapped after closing slightly lower. Meanwhile, the Russell 2000 opened higher but failed its all-time high by 2 points after stalling at 1,522 and finishing slightly in the red with a 0.4% loss.

Utilities showed the most sector strength after rising 0.4%. Energy took it on the chin after tumbling 1% while Materials stumbled 0.6% to lead sector laggards.

In economic news, New Home Sales rose 6.2% to a 10-year high rate of 685,000 units in October, versus expectations for a 10% decrease to a 600,000 unit pace.

The November Dallas Fed manufacturing index fell 8.2 points to 19.4, more than erasing the 6.3 point increase to 27.6 in October. Expectations were for a print of 24.5. The employment component plunged to 6.3 after a 0.4 point gain to 16.7 previously, with hours worked at 11.5 from 13.7 and wages at 14.2 from 22.5.

U.S. e-commerce spending will jump 17% to $6.6 billion on Cyber Monday from a year ago, according to Adobe Systems estimates, while on-line holiday season shopping is on track to rise to $107 billion to capture 11% of the total spend, according to EMarketer. Other reports suggested that Amazon claimed nearly 50% of all Black Friday on-line sales and is forecast to take nearly half of the growth in on-line holiday spending as well. Meanwhile, ShopperTrak reported in-store traffic sank roughly 1%.

The Russell 2000 ETF (IWM) made a run to $151.62 but failed its all-time high of $151.77 that was tapped last Wednesday. Resistance is at $151.75-$152 with continued closes above the latter getting $153-$155 in play. Short-term support is at $150-$149.50 with a move below the latter likely leading to additional weakness.

RSI recently failed mid-October resistance near the 70 level and is in a slight downtrend. Support is at 60 with a move below this level being a bearish signal.

The iShares PHLX Semiconductor ETF (SOXX) traded to an all-time high of $181.88 last Wednesday and $181.87 during Friday’s shortened session to form a temporary short-term double top. Resistance is at $180-$180.25 following today’s backtest to $179.17. Current support is at $179-$178.50 with a move below $177.50 leading to further weakness.

RSI has been trying to hold resistance at the 70 level throughout the month but is back in a downtrend. Support is at 60 with risk to 50 on a move below this level.

The action in IWM and SOXX should provide good clues for market direction this week. If they both continue to weaken, a pullback could be in the cards.

I have a Profit Alert for RMBS this morning.

Momentum Options Play List

Closed Momentum Options Trades for 2017: 51-21 (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.

Twitter (TWTR, $21.82, down $0.60)

TWTR January 24 calls (TWTR180119C00024000, $0.55, down $0.22)

Entry Price: $0.70 (11/22/2017)
Exit Target: $1.40
Return: -21%
Stop Target: None

Action: Fresh support is at $21.75-$21.50following yesterday’s backtest to $21.70. Lowered resistance is at $22-$22.25.

Bank of America (BAC, $26.59, flat)

BAC January 28 calls (BAC180119C00028000, $0.42, flat)

Entry Price: $0.63 (11/16/2017)
Exit Target: $1.25
Return: -33%
Stop Target: None

Action: Monday’s high tapped $26.92. Resistance is at $26.75-$26. Support is at $26.50-$26.25.

Rambus (RMBS, $15.19, up $0.02)

RMBS January 15 calls (RMBS180119C00015000, $0.63, down $0.02)

Entry Price: $0.35 (11/16/2017)
Exit Target: $0.70
Return: 71%
Stop Target: 60 cents (Stop Limit)

Action: The Stop Limit at 60 cents tripped on yesterday’s pullback to $14.90.

While disappointed we were stopped out, I will keep shares on my Watch List for another possible reentry point.

TiVo (TIVO, $18.00, down $0.45)

January 20 calls (TIVO180119C00020000, $0.45, down $0.10)

Entry Price: $0.60 (10/31/2017)
Exit Target: $1.20
Return: -25%
Stop Target: None

Action: Fresh support is at $17.75-$17.50. Resistance is at $18.25-$18.50.

Limelight Networks (LLNW, $5.90, up $0.04)

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: 414%
Stop Target: $1.70 (Stop Limit)

Action: Resistance is at $5.90-$6. Support at $5.75-$5.70.

TherapeuticsMD (TXMD, $5.99, flat)

TXMD December 7.50 calls (TXMD171215C00007500, $0.15, flat)

Entry Price: $0.95 (8/17/2017)
Exit Target: $1.90
Return: -84%
Stop Target: None

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