Pre-Market for 1/5/2018

Dow Clears 25,000

8:00am (EST)

The market showed momentum for the third-straight session following better-than-expected economic data. The Russell 2000 climbed 0.2% while finally clearing its early December and previous all-time high following the intraday push past 1,560. The Nasdaq followed suit after rising 0.2% and trading to a record high of 7,098 while holding the 7,000 level for the third-straight session.

The Dow was up 0.6% and showed the most strength after clearing another thousand-point milestone while reaching a lifetime intraday high of 25,105. The S&P 500 also kissed a fresh all-time peak of 2,729 after climbing 0.4%.

Financials were strong with the sector popping 1% followed by Materials which was up 0.9%. Real Estate sank 1.7% while Utilities remained weak after sliding another 0.8% to extend its losing streak to 3-straight sessions. These were the only sectors that closed lower.

The Russell 2000 ETF (IWM) is trying to clear and hold the upper end of its trading range between $152-$154 following Wednesday’s close above the latter and Thursday’s run to $155.15.

These levels had been holding to close out 2017 with prior resistance at $153.75-$154. The early December all-time high reached $155.41 and is back in play as long as $154 holds over the near-term. Support is at $152.75-$152.50 on a close below $153.75.

Trading graph

RSI is facing December resistance at 65 with a move above this level being a bullish development for a push towards 70-72 and late November hurdles. A close below 50 would be a bearish development going forward.

The Consumer Discretionary Select Spiders (XLY) broke out of a tight trading range between $98.50-$99.25 following its third-straight close above the $100 level. Thursday’s 52-week and all-time peak tapped $101.11.

Fresh resistance is at $102-$102.50 on continued strength. Support is at $100.50-$100.25 with a move below $100 likely signaling a possible short-term top.

Trading graph

RSI is approaching one-month resistance in the 80-85 area and is signaling slightly overbought levels.

I have set an initial Stop Limit for our SNE trade to start protecting profits.

Momentum Options Play List

Closed Momentum Options Trades for 2018: 0-0 (0%). 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, $30.19, up $0.39)

BAC February 31 calls (BAC180216C00031000, $0.60, up $0.16)

Entry Price: $0.50 (1/4/2018)
Exit Target: $1.00
Return: 20%
Stop Target: None

Action: Shares traded up to $30.44 with fresh resistance at $30.25-$30.50 holding. The options opened at 46 cents and reached an intraday peak of 72 cents. Rising support is at $29.75-$29.50.

Sony (SNE, $47.25, up $0.95)

SNE February 48 calls (SNE180216C00048000, $1.50, up $0.40)

Entry Price: $1.05 (1/3/2018)
Exit Target: $2.10
Return: 43%
Stop Target: $1.15 (Stop Limit)

Action: Set an initial Stop Limit at $1.15 to start protecting profits.

Fresh resistance is at $47.50-$47.75 with yesterday’s high tapping $47.26. The 52-week peak is at $48.33. Rising support is at $47-$46.75.

Array BioPharma (ARRY, $13.32, down $0.16)

ARRY February 14 calls (ARRY180216C00014000, $0.95, down $0.05)

Entry Price: $1.00 (1/2/2018)
Exit Target: $2.00
Return: -5%
Stop Target: None

Action: Support is at $13.25-$13 with shares closing on Thursday’s low. Lowered resistance is at $13.50-$13.75.

Rambus (RMBS, $14.48, up $0.08)

RMBS February 15 calls (RMBS180216C00015000, $0.35, flat)

Entry Price: $0.30 (1/2/2018)
Exit Target: $0.60
Return: 17%
Stop Target: None

Action: Yesterday’s high hit $14.51. Resistance is at $14.50-$14.75 and the 50-day moving average. Support is at $14.25.