Markets jump on trade news. Stocks are in the middle of the supply zone (resistance) so bears (myself included) will likely go short around 195. Any move above 200 should lead to a short squeeze and much high prices.

Hi everyone.

At the end of my last post, I mentioned that we would probably have another small move upwards before moving sharply lower. I think the trade news catalyst has sparked that rally upwards. I think it is a good idea to short at 195 with a stop loss just below 200. The year end target would be the low 170s with a final target in the low to mid 150s. The weekly bearish divergence (displaying the waning momentum) along with the index being at resistance is just too juicy of an opportunity to pass by.

QQQ weekly 10_12_2019.JPG

I’m going to use PSQ to go short QQQ in my Roth IRA to avoid capital gains taxes. Remember that you can only purchase (go long) stocks in Roth IRAs. The stop loss on my PSQ trade will be at around 26 with an initial target at about 30. Initial entry will be at around 27 and I plan to take the trade sometime next week (assuming the index goes up). 




Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s