QQQ TA, and puts vs. shorts:
Since 8/5, qqq has been in a 122-127.5 trading range. Today, we've already tested both ends of that range. Before 8/5, 122 was a resistance level, which got tested a couple of times before qqq broke above it. If we close below 122, it's a good gamble that qqq will reach next support at 111. Below that, support at 100.
If I were shorting qqq, I'd sell the shorts to cut my losses if qqq closes above 127.5. Since I'm using puts, I'll hold them, and buy more puts with each 5% move above 127.5. Or maybe I'll wait till a new, higher short-term trading range is established. With puts, I can't take advantage of price movements of less than 10%. Anything less than that, the spread eats up my gains. With more than a 10% move (down, hopefully), the leverage of puts helps me. |
