In my weekend update to subscribers I said that Monday may try an early bounce to get the oscillators like RSI out of the basement, but that the path is now down. Further as we are starting earnings season I thought it better to stick to ETF’s rather than individual stocks. The DIA and the IWM did not give anywhere near enough of a bounce to where I would short them. The QQQ though was almost in the shorting zone. I was looking at August puts (so I could write against them if I wanted to later) so I should not have been so precise on the entry. As I always say, opinions on the market don’t count for much — executions do, and unfortunately I dithered away a good entry opportunity that fell right in line with my plan, by looking for a few cents cheaper on the entry price. 

Hopefully though, now you can see what I have been saying the last few weeks. The turn when it comes is usually hard and fast, and pushing the long side the last few weeks would put you underwater quickly. Many stocks have wiped out the entire gains of 2024. For example the DJIA is back where it started the year. (chart attached). Two really hard down days the market probably needs to breathe, so sideways to higher for a couple of days will not surprise. However as I see it, the vast majority are still bullish asking “where is support:?”, whilst I am only interested in asking “where is resistance?” to sell on the next bounce. The first move is always hard to get because it’s an inflection point. But there is almost alway a second, third, and fourth chance. 

A calendar put spread is another strategy I am considering right now might work. A rally would eat the hefty premium on the short leg whilst maintaining a longer term bearish position. Could be a win/ win.