Option Investor
Market Updates

QQQ's can't muster rally

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Traders that may still be holding their put play in the QQQ's from Friday should be lowering their stops to $44.75 at a minimum. It's very tempting to continue to hold this trade overnight as there appears to be enough late-day weakness for a lower opening tomorrow morning.

The VIX is also "hinting" towards a lower opening tomorrow morning as it continues to rally and hold above 32 after this afternoon's "head fake." The increase in put buying helps the downside potential for our QQQ put play, and the lower stop at $44.75 locks in our profit.

Market Volatility Index (VIX.X) Chart - 60-minute interval

After today's price action, the bearish object of 41 for the QQQ's is looking more attainable. Just to recap, the bearish price objective for the Nasdaq Composite (NDX.X) is 1,900, and 1,100 for the S&P 500 (SPX.X).

Jeffrey Canavan
Assistant Analyst

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