MomentumOptions.com Pre-Market for 12/5/2017
Bulls Fail to Hold Record Gains
8:00am (EST)
U.S. markets closed mostly lower to start the week despite Monday morning merger news and the preliminary passage of the tax bill after Friday’s closing bell. The Dow traded to an all-time intraday high of 24,534 but added just 0.2% on the pullback afterwards. The S&P 500 pushed a lifetime peak of 2,665 before giving back nearly 3 points, or 0.1%, into the closing bell.
The Russell 2000 reached a record high north of 1,559 shortly after the open but struggled holding its gains while finishing 0.8% lower. Meanwhile, the Nasdaq opened in positive territory but failed the 6,900 level by a point before spending the majority of the session underwater after dropping just over 1%.
Financials zoomed 1.5% while Consumer Discretionary and Materials jumped 1.2% and 1% to led sector strength. Real Estate and Technology paced the laggards after falling 1.6% and 1.3%, respectively. Healthcare sank 1.2%.
The VelocityShares Daily Inverse VIX (ZIV) traded higher throughout the session while peaking at 81.45 intraday. Lower resistance at 81.50-82 held with a move above the latter likely leading to a test of the all-time high at 82.42. Support has moved up to 78.50-78 and the 50-day moving average on another move back below 80. A close below 78 would be a bearish development and would likely signal upcoming market weakness.
The Industrials Select Sector Spider (XLI) made a run to $75.10 with new resistance at $74.50-$75 holding into the closing bell. Continued closes above the latter would be a bullish development. Rising but shaky support is at $74-$73.50 with risk to $73-$72.75 on a move below the latter. RSI is back in a slight uptrend with resistance at 70-75. Support is at 65 from with a close below this level likely confirming upcoming weakness.
I have updated the parameters of our CC trade.
Momentum Options Play List
Closed Momentum Options Trades for 2017: 53-21 (72%). 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.
Chemours (CC, $49.44, down $2.40)
January 47 puts (CC180119P00047000, $1.80, up $0.60)
Entry Price: $1.30 (12/4/2017)
Exit Target: $2.60
Return: 38%
Stop Target: None
Action: Shares have failed resistance at $54 and the 50-day moving average throughout November and into this month with yesterday’s high reaching $53.17 on the open. The fade below $50 and backtest to $49.38 into the closing bell was exactly what we wanted to see. A move below $48 would be a continued bearish development with risk to $46-$44.
Viavi Systems (VIAV, $8.93, down $0.25)
VIAV January 9 calls (VIAV180119C00009000, $0.45, down $0.10)
Entry Price: $0.65 (11/29/2017)
Exit Target: $1.30
Return: -31%
Stop Target: None
Action: Fresh support is at $8.75 following Monday’s backtest to $8.91. Lowered resistance is at $9.
Twitter (TWTR, $20.40, down $0.31)
TWTR January 24 calls (TWTR180119C00024000, $0.25, down $0.05)
Entry Price: $0.70 (11/22/2017)
Exit Target: $1.40
Return: -64%
Stop Target: 15 cents (Stop Limit)
Action: Set an initial Stop Limit at 15 cents to save the remaining premium.
Support is at $20.25-$20 with a move below the latter likely tripping the Stop Limit. Resistance is at $20.50-$20.75.
TiVo (TIVO, $16.50, down $1.20)
January 20 calls (TIVO180119C00020000, $0.20, down $0.15)
Entry Price: $0.60 (10/31/2017)
Exit Target: $1.20
Return: -67%
Stop Target: None
Action: Fresh support is at $16.50-$16.26. Lowered resistance at $16.75-$17. There was no news to account for yesterday’s 6.7% tumble but the position took a severe blow.
TherapeuticsMD (TXMD, $6.04, down $0.16)
TXMD December 7.50 calls (TXMD171215C00007500, $0.10, flat)
Entry Price: $0.95 (8/17/2017)
Exit Target: $1.90
Return: -89%
Stop Target: None
Action: Support is at $6-$5.75. Resistance is at $6.25.