MomentumOptions.com Pre-Market for 2/22/2018
Small-Caps Close Slightly Higher
8:00am (EST)
The market traded in positive territory during the first half of Wednesday’s action but in a tight range ahead of the Fed minutes. The indexes gained strength heading into the news and traded significantly higher following dovish statements made by the Fed. However, volatility returned as the major indexes gave up their gains to finish mostly in the red.
The Dow declined 0.7% after testing an intraday peak of 25,267 before closing below the 25,000 for the second-straight session. The S&P 500 slipped 0.6% after racing to a high of 2,747 and was able to hold the 2,700 level for the fourth-straight session despite the late day weakness.
The Nasdaq dipped 0.2% despite testing an intraday high of 7,338 to extend its losing streak to 3-straight sessions. The index has been holding the 7,200 level for 4-straight sessions and is just over 1% above its 50-day moving average.
Bucking the trend was the Russell 2000 after rising 0.1% while trading to a high of 1,555. However, resistance at 1,550 and the 50-day moving average continues to be a stickler and levels that failed to hold into the closing bell.
Financials and Industrials showed some strength with the sectors gaining 0.1% and 0.03%. Real Estate and Energy led sector laggards after falling 1.8% and 1.7%, respectively. Utilities and Consumer Staples sank 1.3% and 1.2%.
The VelocityShares Daily Inverse VIX (ZIV) traded to an intraday high of 70.63 with lower resistance at 70.50-71 holding. Continued closes above the latter would be a bullish signal for the market. Support at 68-67.50 was s-lit on the backtest to 67.86 i to the closing bell.
The Spider Small-Cap 600 ETF (SLY) $134.48 traded higher for the 7th time in 8 sessions after peaking at $134.48 intraday. Near-term resistance at $134-$134.50 held into the closing bell with a move above the latter being a continued bullish development. Support at $133-$132.50 held on the fade to $132.62 with a close below $132 signaling a possible backtest towards $130.
RSI is trying to hold short-term support at 50 with continued closes above this level being bullish for a possible run towards 55-60. Support is at 40 on a close back below 50.
The Dow Jones Transportation Average ($TRAN) traded up 10,560 with short-term resistance at 10,600 holding. Continued closes above this level gets 10,750-10,800 and the 50-day moving average in play. Support is at 10,350-10,300 with a move below 10,200 being a bearish development.
RSI is trying to hold near-term support at 40 with risk to 30 on a move back below this level. Resistance is at 50.
While I have a bevy of New Trades waiting in the wings, yesterday’s action into the closing bell was disappointment and why I didn’t open additional bullish trades. There are still bullish signals that are showing possible higher highs but we have to make certain the v-shape recovery in the charts don’t stall with a possible w-shape pattern waiting in the wings.
I have updated our current trades so let’s go check the tape.
Momentum Options Play List
Closed Momentum Options Trades for 2018: 7-5 (58%). 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, $31.86, down $0.06)
BAC March 33 calls (BAC180316C00033000, $0.25, down $0.03)
Entry Price: $0.50 (2/15/2018)
Exit Target: $1.00
Return: -50%
Stop Target: None
Action: Shares traded to a high of $32.37 and within 30 cents of its 52-week peak on Wednesday. Support at $31.75-$31.50 held on the backtest to $31.77. Resistance remains at $32-$32.25.
Intel (INTC, $45.94, down $0.38)
INTC April 46 calls (INTC180420C00046000, $1.95, down $0.25)
Entry Price: $1.28 (2/14/2018)
Exit Target: $2.60
Return: 46%
Stop Target: $1.90 (Stop Limit)
Action: The Stop Limit at $1.90 held into the close but will likely trip on this morning’s open on additional weakness, or choppy trading. If shares fall below $45.75 on the open, close the trade, to protect profits.
Resistance at $46.50-$46.75 held with the high tapping $47.06. The close below upper support at $46-$45.75 was a slightly bearish development.
Viavi Systems (VIAV, $9.81, down $0.05)
VIAV March 10 calls (VIAV180316C00010000, $0.25, flat)
Entry Price: $0.45 (2/6/2018)
Exit Target: $0.90
Return: -44%
Stop Target: None
Action: Support is at $9.75-$9.50. Resistance is at $10.