Intermittent Opinion Update: Large Tech Bounce after our Key Level touched. What's next?
Was this week the beginning of a larger risk-off event? Or a short squeeze?
Hi Guys,
It looks like stocks are set to recover a portion of yesterday’s large selloff. Are we out of the woods yet? I’ll discuss below.
Although I publish Mon-Thurs, I just wanted to send Members a quick update/opinion after the last two days of extreme market volatility (Bi-Directional Trading).
First, let’s take a look at a Key Opinion issued for our private Community: that if we somehow selloff to the NQ (Nasdaq-100) 18000-18050 area, I would expect a powerful bounce there. I always start my analysis with NQ and ES, and that will translate into how SPY ETF and QQQ ETF will move.
This was shared before yesterday’s selloff and also before today’s jobs report data point. In other words, we had a plan if NQ did get there.
Aligned with my thinking that a bounce would arrive in that region (if seen), I took in-the-money SPY and QQQ Calls with an intermediate-term expiry (described in yesterday’s Educational Note on intermediate-term investing) in my longer-term accounts.
Bounce has come, and I will share execution tips for Members below.
This was the reason I shared 18000-18050 as a key level for Members - that I believed that region would produce an intermittent bounce. It suggests that we shouldn’t fear that region on the first test. How long does it last - I don’t know - but that is the reaction I was looking for.
See how ES/NQ levels come into fruition even when trading SPY/QQQ? I will continue to do my best for folks.
Also - some other good news.
In our 3/19 AMD DCF Conclusion Study, I shared a very specific way of thinking/plan for AMD. See excerpt below from DCF Conclusion Study.
Yesterday we reached the 165 region, and I wanted to begin scaling in a longer-term Call as that is a Strong DCF Level (at least from the first test of that area) based on my observation.
Yesterday’s selloff opened up two doors for us: 18000-18050 NQ (Bounce Region) and also AMD in the 160 region (DCF Region).
Tremendous move in BOTH today! :D
On a side note, in my own intraday accounts today, I wasn’t able to take advantage of today’s bounce as I was far too hedged and ended up with a minor loss. I sold puts and combined that with a small short on MNQ/MES to hedge. The market’s extended rally made the short position outweigh the premium from the short puts.
The good news though is that my key levels guided me to a small weekly gain this week for intraday activity, allowing me to have some uncorrelated diversification from my long-term accounts.
I will continue to share thoughtful content on intraday thinking, intermediate-term strategy, and later on, long-term positioning guides.
Below I will quickly discuss the new battleground - join us. We can see the power of key levels!