3/17/2020 (2:30 am mountain time) Futures indicate that markets will bounce after the steep sell off yesterday.

Hi everyone. I was expecting a down day like most people on Monday and surprisingly we actually went down a lot. I thought that since it was very obvious, we would open red then bounce and close green. 

The premarket indicates that QQQ wants to open near 180, which is right at the downward breakout level. I suspect we will get a lot of selling pressure in the first 30 minutes to an hour, but suspect QQQ will close the day up between 5% – 8%. I think with the extreme volatility, we will likely test the 185-187 range tomorrow as well as possibly testing the lows in the low 170s.

The current price action hints that there is a lot more downside to come in the following weeks. Like I said in a previous post a few days ago, QQQ looks like it wants to test the 140-150 support zone, although with these large swings, QQQ could hit that level in just one or two days.

Below is the weekly chart of QQQ. 

QQQ Weekly 3_17_2020

Also, I ended up selling the 150 strike price put (expiring next Friday) on Boeing for $25 towards the beginning of the trading session when Boeing briefly hit ~$137.

Since I’m selling the put, the owner of the put gets the right to sell me 100 shares at $150 anytime before expiration (American option). Thus, the break even for me is if Boeing drops to $125 by next Friday, which is a price I’m willing to own more shares at anyways. Once I get these shares assigned to me, the plan is to sell near or at the money weekly calls to hedge against downside. 

 

 

 

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