I hope you all had a wonderful, relaxing break away from the markets!
We’re looking at a chart of the Nasdaq 100, which has significantly deteriorated since I started looking for further weakness last month.
This correction is rotational in nature. While tech is getting hit, banks and small cap stocks are seeing a ton of money flow. Normally when a “big correction” hits, it takes everything with it. The fact that only particular sectors are seeing weakness is still a fairly bullish sign.
Trade #1: NFLX
This is a carryover from a previous trade idea, but because earnings are up soon and enough time has gone on, we need to change up the trade setup.
Trade Setup
Expected Price: 145
Sell to Open NFLX Aug 125/120 Put Spread
Tier 1: Open at 0.65, Close at 0.15
Tier 2: Open at 0.95, Close at 0.65
No Tier 3 Until After Earnings
Trade #2: TSLA
We played this back on the short side on June 8th, and it worked out great. Now I’m looking for a pull into the 50 day moving average, as well as previous resistance becoming support.
Trade Setup
Expected Price: 330
Sell To Open TSLA Aug 280/275 Put Spread
Tier 1: Open at 0.90, Close at 0.30
Tier 2: Open at 1.30, Close at 0.90
No Tier 3 Until After Earnings