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QQQ Trade Setup & Entry

QQQ (Nasdaq 100 Tracking ETF) will be added as an official, yet somewhat aggressive short trade in anticipation of a breakdown & likely gap below this minor uptrend line next week. The final target at this time is 121.82 (or the purple uptrend line, should that come in first if/when QQQ approaches the 122 area). The maximum suggested stop is any 60-minute close above 131.60 (or lower, if only targeting T1 or T2).

QQQ 60-min chart Feb 17th

QQQ 60-min chart Feb 17th

As shorting a stock or ETF which is well-entrenched in an bullish uptrend before any sell signals simply in anticipation of a breakdown below support which has yet to occur is an aggressive trading strategy, more conventional or risk-adverse traders might opt to wait for a confirmed break & 60-minute candlestick close below the minor uptrend line and/or 128.90 level before initiating a short position. One could also take a starter (partial) short position here, bringing the the trade to a full (or over-weighted) position if & when QQQ prints a 60-minute close below 128.90, which is minor support plus slightly below the minor uptrend line.

The suggested beta-adjustment for this trade is 1.0 (i.e.- a typical position size) with an over-weighted position/beta-adjustment of 1.5, should the QQQ break & print a 60-minute close below 128.90 early next week. Keep in mind that the U.S. markets are closed on Monday for President's Day. If using any leveraged bearish ETFs such as QID (2x short QQQ) or SQQQ (3x short QQQ), make sure to factor in the amount of leverage to your position size.

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Feb 17, 2017 2:02pm|Categories: Completed Trades - Short, Equity Market Analysis|Tags: , |6 Comments

6 Comments

  1. joefriday February 17, 2017 2:06 pm at 2:06 pm

    Yep… I’m in March QQQ $131 puts…starter size.. will add on beak of $128.50

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  2. Dazi February 17, 2017 2:21 pm at 2:21 pm

    I’m going to try QID, starter size.
    Just bought at 20.03, we shall see.

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  3. Art February 17, 2017 2:27 pm at 2:27 pm

    Me too Joe but I am out to April- no big deal though

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  4. Gonewiththewind February 17, 2017 2:55 pm at 2:55 pm

    Just got in one /NQ short at 5311. Tighter stop. 18-20 handles above ATH. Any thoughts randy.

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  5. jupiter February 17, 2017 3:19 pm at 3:19 pm

    If the q’s fall , do you think that gdx will also fall. I tend to think of them as being inverse to one another — or doesn’t this happen to gold and gdx after the options ramp?

    I’m in a starter to short the q’s . Thank you for the excellent analysis leading up to Op Ex, and pointing to other market timing after other Op Ex’s.

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  6. jasonstevanhill February 17, 2017 3:24 pm at 3:24 pm

    March 31 QQQ $126 puts.

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