Yes, I’m Shorting the Nasdaq Triple QQQ’s (Will I Get Run Over)

This trade only seems sane, but it’s crazy when the Nasdaq QQQ stock is up eight straight weeks in a row.  It’s still not at the top of the weekly trading channel, that would be the optimum place to short the stock.  I just feel that the QQQ will not make it to the top of the range.  You ask, What makes me think that?  Well, Dre (lol) when we look under the hood of the technicals, they are weak.

The Nasdaq advancing stocks vs declining stocks are weak, the Nasdaq tick chart is weak as well.  Those are the two technical that I love to look at.  I also looked at the VIX.  It is crashing right up against recent support possibly due for a bounce.  When you bet against a stock market that just doesn’t want to go down, it seems like your standing in front of a 40 car freight train steaming at you and your only 50ft away.   So what did I do?

I sold call credit spreads in front of the market.  One that expires this Friday and another one with the strike price a little further out that expires in 31 days.  That one has a delta of 20.  I usually sell credit spreads further out, but  feel it just can go any higher.  Well, I take that back.  I feel that the 8 week rally needs to slow down.  If it does, both of these trades should become a winner.  You know Dretrades love sideways action.  When you sell credit spreads, you don’t need the stock to go down, you basically just want the stocks to stop going up.  With Theta on my side, these options are losing value everyday.  Since I sold them, that loss is money in my pocket.

Check out video to see the details of the options trade.  I show you what I put on and why I put the trade on.  Hope you enjoy.  Any questions, hit me up on twitter @dretrades