I will likely hold off on the trades I mentioned in the previous post because of futures being down a tremendous amount. The only reason why I’m hesitant to buy my two micro cap stocks is because I suspect they won’t hold up to the market drop and will slice through the stops near support. It seems that smaller companies do worse than larger companies in large market drops.
However, I am now bullish in the short term if we open at these prices (down 5%). I am strongly considering buying the gap down on QQQ as long as we open below 200 (for a quick day trade).
Like I mentioned in previous posts, risk reward strongly favors buying at the open tomorrow if futures stay at this price level. We look to open between the strong support zone of 195 and 200 for QQQ, and this is the first retest of the previous lows, meaning this is a perfect buying opportunity with relatively low risk.
For a swing trade, you can buy on open (as long as index below 200) and put in a stop 7-10 dollar stop loss below your entry and look to sell at 217-220.