MomentumOptions.com Pre-Market for 12/20/2017
Markets Slips Ahead of Tax Reform/ Trade Alert (INTC)
8:00am (EST)
U.S. markets opened mixed and were slightly weak throughout Tuesday’s session and ahead of the House vote on the Republican tax-reform package. After the vote was passed, the market rebounded off it lows but still closed in the red as the bill now gets sent to the Senate for a vote tonight.
The Russell 2000 was the weakest link after tumbling 0.8% while finishing a point off its session low. The S&P dropped 0.3% while the Dow fell 0.2% to snap two-session win streaks. The Nasdaq stumbled 0.4% after failing to hold the 7,000 level for the second-straight session.
Consumer Staples and Energy squeaked out small gains with the sectors rising 0.1%. Real Estate got punished with the sector sinking 1.9% while Utilities faltered 1.8%.
The VelocityShares Daily Inverse VIX (ZIV) traded to an all-time high of 86.84 on the open while closing higher for the 9th-straight session. Lower resistance at 87-87.50 held with continued momentum towards 89.50-90 on a move above the latter. Support remains at 85.50-85 with today’s low tapping 85.85. A move below 84 would be a slightly bearish signal.
The Spider Small-Cap 600 ETF (SLY) tested a high of $134.48 but failed near-term resistance at $134.50-$135 and the all-time peak from earlier this month. Continued closes above these levels would be a bullish sign for a possible run towards $137-$137.50. There is risk to $130-$129.75 and the 50-day moving average on a move below $132.
RSI closed below the 60 level with support at 50 on continued weakness. A move back above 65 would be a slightly bullish signal for another run at all-time highs.
The Spider S&P Retail ETF (XRT) traded to a high of $45.58 with longer-term resistance at $45.75-$46 holding. A close above the latter gets the 52-week peak at $46.85 in play. The fade to $44.97 afterwards held upper support at $45-$44.50 with a move below the latter signaling additional weakness. The 50-day moving average remains in a nice uptrend after clearing the 200-day moving average and forming a golden-cross earlier this morning.
RSI has pulled back from resistance at 70 with risk to 60 on a continued pullback.
I have updated the parameters of our INTC position following yesterday’s surge to bring the monster gains up to 400%. I could also have two fresh trades today so stay locked-and-loaded.
Momentum Options Play List
Closed Momentum Options Trades for 2017: 55-23 (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.
Spider Gold Shares (GLD, $119.82, up $0.09)
GLD January 117 puts (GLD180117P00117000, $0.35, flat)
Entry Price: $0.95 (12/11/2017)
Exit Target: $1.90
Return: -63%
Stop Target: None
Action: Resistance is at $120-$120.50 and the 200-day moving average. Yesterday’s high reached $119.90. Support is at $119.25-$119.
Intel (INTC, $47.04, up $0.78)
INTC January 45 calls (INTC180119C00045000, $2.60, up $0.70)
Entry Price: $0.53 (12/11/2017)
Exit Target: $2.50, raise to $3.25
Return: 400%
Stop Target: $1.60, raise to $2.10 (Stop Limits on half)
Action: Raise the Exit Target from $2.50 to $3.25. Raise the Stop Limit from $1.60 to $2.10 on half the trade and keep a trailing Stop Limit at $1.60 on the other half.
Fresh resistance is at $47.25-$47.50 with yesterday’s 52-week high reaching $47.26. A close above the latter gets $48-$50 in the mix. Rising support is at $46.75-$46.50.
Bank of America (BAC, $29.45, down $0.03)
BAC January 30 calls (BAC180119C00030000, $0.55, down $0.02)
Entry Price: $0.50 (12/8/2017)
Exit Target: $1.00
Return: 10%
Stop Target: None
Action: Resistance is at $29.50-$29.75. Support is at $29.25-$29.
Viavi Systems (VIAV, $8.82, down $0.03)
VIAV January 9 calls (VIAV180119C00009000, $0.30, flat)
Entry Price: $0.65 (11/29/2017)
Exit Target: $1.30
Return: -54%
Stop Target: None
Action: Tuesday’s low tapped $8.78. Support is at $8.75-$8.50. Resistance is at $9.
Twitter (TWTR, $25.08, up $0.40)
TWTR January 24 calls (TWTR180119C00024000, $1.80, up $0.25)
Entry Price: $0.70 (11/22/2017)
Exit Target: $2.50 (closed half @ $1 on 12/18/2017)
Return: 100%
Stop Target: $1.20 (Stop Limit)
Action: Fresh resistance is at $25.25-$25.50 following yesterday’s run to $25 and fresh 52-week peak. Rising support is at $24.75-$24.50.