goldbug1

QQQ - Trade Ideas - Market Overbought

Short
goldbug1 Updated   
BATS:QQQ   Invesco QQQ Trust, Series 1
I see so many posting trades using an hour or 30 minute candles, counting waves like it is meaningful. It is not, it is simply amateur at best unless you are day trading. For swing trades I like I always start with the weekly candles. It paints a broader picture, not just some inner day noise that randomly prints patterns.

So I have been watching this market for a couple months now, continue to grind higher and higher and higher, BUT we have some uncertainty coming up, and also we printed a potential short pattern on a weekly time frame.

Like most things in life, other than war and being sick, longer is better!!! ;).

This is a trade I like here and will take myself next week as I like buying over sold markets, and selling over bought. Now yes.... there is the old adage "don't short into a bull market", but that is more of a newb type of thing and not something I pay much attention to. Yes the market can stay overbought longer than shorts can stay liquid, but that is why we have a stop!!!

Bearish pinbar into an extended market and looking for a potential 10% or greater pullback in the near term.

I posted two trade ideas, one is a swing trade for you traders out there that like action. Short and sweet, look for 1-3 weeks to play out.

The other is a Position trade, and the one I will be taking. Notice the stop is moved higher, and the targets are much lower. It also has a greater Reward : Risk to it. Over the years I have given up being Action Jackson and I have had a lot of gains over the past year and I want to hedge them so this is one way to do that.

No I am not selling NVDA though it has become quite a huge position in my portfolio. At least not yet, the market is still bull!!!

So before I get the comment "if you think it is still bull, why are you shorting here?"

1) Over bought conditions (slightly not a hyper excited market)
2) After large runs 10% pullbacks are quite common
3) Election year and the debate is next week - creating a little uncertainty on how it may come out.
4) Biden moving up in the polls, market is hesitating. I read the tea leaves, so I don't care what you think of Biden or Trump. The fact Trump met with business leaders, when 4 years ago they wouldn't give him the time of day. Even silicon valley and the NY bankers are warming up to Trump. So if Biden wins, expect the market to pullback, Trump wins, may get another rally.
5) Bearish Pinbar on the weekly
6) The fact "Elliott Wave Masters" are bullish still on their 30 min chart not realizing this could be a B leg of a corrective sequence, since it has not closed above the 0.618 extension.
7) Because I made a lot of money over the last year and I want to hedge!!!
8) Straight up I've been doing this longer than you, or most of you anyways.

Feel free to comment and if you don't know how to calculate risk, ask someone, don't just short blindly. Yes you can also sell calls or buy puts, I will post that trade over the weekend.
Trade active:
Trade Update for the record.

Short 100 shares @ 476.84
Short Jun28 476C @ 4.26
Short Jun28 480C @ 2.29

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