Index and Earnings Options Play List for 8/16/2018

Major Support Levels in Play

8:00am (EST)

The market was weak throughout Wednesday’s session following Turkey’s implementation of taxes on American goods from cars to tobacco. Turkey continues to blame the U.S. for its economic woes and imposed retaliatory tariffs on U.S. products after the White House had increased its own tariff levels last week.

Gold and silver stabilized after tapping fresh 18-month lows while copper fell and is approaching late July lows. Potential for contagion in other emerging markets along with possible currency wars push volatility to new heights.

The Russell 2000 sank 1.3% following the backtest to 1,663 and close below the 50-day moving average. July support is at 1,660-1,650 on continued weakness.

The Nasdaq stumbled 1.2% after testing an intraday low of 7,732. Fresh support at 7,750-7,700 and the 50-day moving average held with a close below the latter being a continued bearish development.

The S&P 500 tanked 0.8% after trading to a low of 2,802. The index held major and mid-July support at 2,800 with a close below 2,790 and the 50-day moving average being a bearish development.

The Dow dropped 0.5% after tumbling a low of 24,965. The blue-chips held major and early July support at 25,000 and the 50-day moving average with risk to 24,800-24,600 and the 200-day moving average on a close below this level.

Utilities and Real Estate were sector leaders after rising 0.9%. Consumer Staples added 0.4% to round out the winners.

Energy got hammered after falling 3.5% and was easily the weakest sector. Materials and Communication Services were hit with losses of 1.6% and 1.4%.

The S&P 500 Volatility Index ($VIX) stayed elevated throughout the session while surging to a morning high of 16.86. We warned of risk to 17.50 on continued moves or a close above 14.50-15 and the 200-day moving average.

There is still upside risk to 20 if 17.50 fails with the July peak at 18.08 and the June high at 19.61 on the peak of Italian election fallout.

Rising support at 13.50-13.25 and the 50-day moving average on a close below 14.50 and a level the bulls likely need to recover this week to avoid panic selling.

RSI is at June highs after clearing lower resistance at 60-65. There is risk to 70-75 and January highs on a move above the latter with the February peak at the 90 level. A close back below support at 55-50 would be bullish for the market.


The Spider S&P 500 ETF (SPY) fell for the 5th-time in 6 sessions with Wednesday’s low tapping $280.16. Upper support at $280-$279.50 held with a move below the latter getting $278.50-$278 and the 50-day moving average in play.

Lowered resistance is at $282-$282.50 with a move back above the latter signaling a possible short-term bottom.

RSI has been in a downtrend and is approaching support at 50. A move below this level would get 45-40 and June lows in play. Resistance is at 55-60.


The Utilities Select Spider (XLU) extended its winning streak to 3-straight sessions after trading to a high of $53.98. Fresh resistance at $54-$54.50 with a close above the latter being a continued bullish development. The 52-week peak is at $57.23.

The 50-day moving average cleared the 200-day moving average earlier this month and a development we said to watch for in mid-July. This formed a golden cross and is typically a bullish technical pattern for higher highs.

Near-term support is at $53.25-$52.75. A close below $52.50 would signal a short-term top.

RSI is back in a slight uptrend with resistance at 65-70. A move above the latter could lead to a run towards 75-80 and early July highs.


Briggs & Stratton (BGG), Caci International (CACI), Cisco Systems (CSCO), NetApp (NTAP), SpartanNash Company (SPTN) reported earnings after Wednesday’s closing bell. (DESP), JC Penney (JCP), (JD), LSI Industries (LYTS), Qiwi (QIWI), Walmart (WMT) are announcing numbers this morning. 


Our top triple-digit winning option recommendations for 2018:

+400% Spider Dow Jones February 250 puts (February 2018)

+400% PowerShares QQQ February 162 puts (February 2018)

+300% Intel February 47 calls (January 2018)

+225% CVS June 65 calls (May 2018)

+209% Boston Scientific BSX July 31 calls (June 2018)

+191% Sony February 48 calls (January 2018)

+175% Big Lots June 40 puts (June 2018)

+168% American Airlines July 40 puts (June 2018)

+133% Progenics Pharmaceuticals May 8 calls (March 2018)

+117% Energous May 17.50 calls (April 2018)

+100% Papa John’s International August 40 puts (August 2018)

+100% Progenics Pharmaceuticals August 8 calls (June 2018)

+100% Spider Dow Jones February 258 puts (January 2018)

+100% Marvell Technology (March 2018)


Boston Scientific (BSX, $34.89, up $1.19)

BSX September 36 calls (BSX180921C00036000, $0.85, up $0.50)

Entry Price: $0.35 (8/2/2018)

Exit Target: $1.10

Return: 139%

Stop Target: None

Action: Resistance is at $35-$35.25 on continued strength. Support is at $34.25-$34.


Viavi Systems (VIAV, $10.46, down $0.47)

VIAV September 11 calls (VIAV180921C00011000, $0.35, down $0.10)

Entry Price: $0.30 (8/13/2018)

Exit Target: $0.90 (Limit Order)

Return: 50%

Stop Target: 30 cents (Stop Limit)

Action: Support is at $10.40-$10.30. Resistance is at $10.50-$10.60.


Upcoming Earnings


After the close: Applied Materials (AMAT), Nordstrom (JWN), Nvidia (NVDA), Voxeljet (VJET), Zoe’s Kitchen (ZOES)


Before the open: Deere & Company (DE)