MomentumOptions.com Pre-Market for 3/12/2018
Dow/ S&P 500 Clear 50-Day MA’s/ Trade Alerts (BAC, PGNX, VIAV)
The market closed sharply higher on Friday after worries over tariffs on steel and aluminum faded as Wall Street focused on an unexpectedly strong jobs report and news that President Trump has accepted an invitation to meet North Korea’s leader.
The Nasdaq zoomed 1.8% after going out at a session and all-time high of 7,560. It was the first new record high since late January with the index rising 4.2% for the week.
The Russell 2000 surged 1.6% after making a run towards the 1,600 level into the closing bell but falling shy by 3 points. The index is just over 1% away from setting fresh all-time highs after adding 4.3% for the week.
The S&P 500 soared 1.7% after closing at its session high of 2,786 and was up 3.5% for the week. The Dow jumped 1.8% after trading to a high of 25,336 to close above the 25,000 for the first time since early February. For the week, the blue-chips gained 3.3% with both indexes clearing their 50-day moving averages following Friday’s gains.
Financials and Industrials led sector strength after popping 2.4% and 2.2% while Technology and Energy were up 1.9%. Financials and Industrials were also up 4.4% for the week and Technology gained 4.2%. There were no sector laggards on Friday, or for the week.
In economic news, Non-farm payrolls rose 313,000 in February, easily topping expectations for the addition of 205,000 jobs last month. Average hourly earnings grew 2.6% over the prior year, versus forecasts for a 2.8% year-over-year increase.
January Wholesale inventories rose 0.8%, topping estimates of 0.7%, but sales dropped 1.1%.
Atlanta Fed’s Q1 GDPNow estimate was trimmed to 2.5% from 2.8%, despite firm jobs report. The nowcast of first-quarter real consumer spending growth fell from 2.5% to 2.2% and the nowcast of first-quarter real private fixed investment growth fell from 3.4% to 2.4%.
Baker-Hughes reported that the U.S. rig count was up 3 rigs from last week to 984, with oil rigs down 4 to 796, gas rigs up 7 to 188. The U.S. Rig Count is up 216 rigs from last year’s count of 768, with oil rigs up 179, gas rigs up 37. The U.S. Offshore Rig Count is down 1 rig to 13 and down 7 rigs from last year’s count of 20.
The S&P 500 Volatility Index ($VIX) fell for a 6th-straight session after tapping a low of 13.31 while closing below its 50-day moving average. Lowered resistance is now at 14.50-15 followed by 16.25-16.50 and the 50-day moving average.
I also mentioned a close below 15 would lead to a possible breakout to fresh all-time highs for the market with fresh support now at 13.50-13. If these levels are cleared, the real battle will be at 12.50-12 and the 200-day moving average.
RSI is at its lowest level since early January with support at 40. A move below this level could lead to a continued backtest towards 35-30.
The Spider Small-Cap 600 ETF (SLY) has traded higher for the 5 of the past 6 sessions with Friday’s peak reaching $138.09. Near-term resistance is at $138.50-$139 with a move above the latter getting all-time highs north of $140 in play. Rising support is at $136.50-$136 with a close below the latter signaling a possible short-term top.
RSI is in a solid uptrend with resistance at 70 on continued strength. Support is at 60.
The Spider Gold Shares (GLD) traded to a high of $125.69 with near-term resistance at $125.75-$126 and the 50-day moving average. A close above $127 would be a bullish development. Shaky support is at $125-$124.75 with risk to $124-$123.75 on a move below the latter.
RSI is pushing near-term resistance at 50 with a close above this level leading to a possible run towards 60. Support is at the 40 level.
The percentage of S&P 500 stocks trading above the 50-day moving closed Friday at 53.37% with near-term resistance at 55%-60%. A close above the latter would be a continued bullish development. Support is at the 50% level.
The percentage of Nasdaq 100 stocks trading above the 200-day moving average is currently at 75.96% and Friday’s high. Early February resistance is at 76%-78% followed by 80% and January support levels. A close below 70% would be a slightly bearish development.
I decided to let the portfolio ride into Friday’s close but I have set Stop Limits on BAC, PGNX and VIAV. I would like to see a continued rally to start the week and ahead of March option expiration on Friday which can bring added volatility.
Momentum Options Play List
Closed Momentum Options Trades for 2018: 10-5 (67%). 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.
Marvell Technology (MRVL, $24.34, up $0.02)
MRVL April 25 calls (MRVL180420C00025000, $0.75, down $0.35)
Entry Price: $0.70 (3/6/2018)
Exit Target: $1.40
Stop Target: None
Action: Shares traded to a fresh 52-week peak of $25.18 with the options peaking at $1.17 before pulling back on heavy volume.
Resistance remains at $24.50-$24.75. Support is at $24-$23.75.
Progenics Pharmaceuticals (PGNX, $8.10, down $0.22)
PGNX May 8 calls (PGNX180518C00008000, $1.35, down $0.15)
Entry Price: $0.65 (2/27/2018)
Exit Target: $1.30, raise to $2
Stop Target: 95 cents (Stop Limit)
Action: Raise the Exit Target from $1.30 to $2. Set an initial Stop Limit at 95 cents to protect profits.
Support is at $8-$7.75. Resistance at $8.25-$8.50.
Sony (SNE, $51.40, up $0.12)
SNE April 52.50 calls (SNE180420C000525000, $1.30, up $0.05)
Entry Price: $1.15 (2/26/2018)
Exit Target: $2.30
Stop Target: None
Action: Fresh resistance is at $51.50-$51.75 with Friday’s peak reaching $51.44. Support is at $51.25-$51.
Boston Scientific (BSX, $28.54, up $0.69)
BSX May 30 calls (BSX180518C00028000, $0.60, up $0.15)
Entry Price: $0.35 (2/26/2018)
Exit Target: $0.70
Stop Target: None
Action: Fresh resistance is at $28.75-$29 with shares closing a penny off the session high. Rising support is at $28.25-$28.
Bank of America (BAC, $32.72, up $0.52)
BAC March 33 calls (BAC180316C00033000, $0.20, up $0.08)
Entry Price: $0.50 (2/15/2018)
Exit Target: 50 cents
Stop Target: 10 cents (Stop Limit)
Action: Set an initial Stop Limit at 10 cents.
Fresh resistance is at $32.75-$33. Support is at $32.50-$32.25.
These options were heavily traded on Friday as over 47,000 contracts exchanged hands. However, we will need shares to make a run towards $33.50 to get back to even.
Viavi Systems (VIAV, $10.64, up $0.15)
VIAV March 10 calls (VIAV180316C00010000, $0.70, up $0.15)
Entry Price: $0.45 (2/6/2018)
Exit Target: $0.90 (Limit Order)
Stop Target: 50 cents (Stop Limit)
Action: Set an initial Stop Limit at 50 cents to protect profits.
Fresh resistance is at $10.75-$11. Rising support is at $10.50-$10.40.
These options also expire this Friday and why I have set a Stop Limit. However, I’m hoping shares make a run towards $11 to start the week so we can close the trade for a triple-digit profit.