To The Moon

55% profit taking both puts and calls in the first 90 mins. Thursday marked the worst day for the S&P 500 and Nasdaq had their biggest one-day loss since Aug 2. 

The S&P 500 lost 1.35% to end the day at 4,376.31. The tech-heavy Nasdaq Composite shed 1.87% to 13,463.97.

Puts under 360, calls above 364.2

Stocks plunged hard on Thursday after a tech rally, sparked by stronger-than-expected Nvidia results, was short-lived. Nvidia shares reached an all-time high after the company reported quarterly earnings and revenue that exceeded lofty analyst expectations.

The company also raised its guidance, with executives predicting third-quarter revenue would climb to $16 billion, or a year-over-year increase of 170%. However, the stock closed just 0.1% higher.

Puts under 436.28, calls above 438.55

The information technology sector the S&P 500′s biggest loser, ending Thursday down 2.15%, weighed by declines in other semiconductor stocks including Advanced Micro Devices and Intel. Shares of major tech companies saw declines during the session, with Amazon losing 2.7%, Apple declined 2.6%, and Netflix dropping 4.8%.

“The tech story is coming back, which is ironic because normally when real yields go up, valuations get hit and the more richly valued stocks do worse,” said Carson Group director and macro strategist Sonu Varghese said, adding that his firm balances its tech holdings along with cyclical stocks, such as small to mid-cap sized industrials and energy names. “We think the economy is actually running fairly resilient right now.”

U.S. Treasury yields climbed on Thursday as investors waited for signals on monetary policy from central bankers’ comments at the Jackson Hole, Wyoming meeting on Friday. The yield on the benchmark 10-year Treasury note was higher at 4.241%, after hitting a 16-year high earlier this week.

Which bird to release during the speech?

Bulls driving the Nasdaq retreated from trying to surpass the 50-day moving average, signaling doubts about the recent session’s recovery. The relative strength index (RSI) was unable to surpass the 50 threshold, signaling a resurgence of bearish sentiment.

Thursday’s price action created what’s known as a bearish engulfing pattern on the chart. This materialized as the red candle entirely overshadowed Wednesday’s green candle. A bearish engulfing pattern serves as a technical cue pointing toward impending price weakness.

Bullish engulfing candle on Nasdaq 100

The bearish engulfing pattern gains additional strength when the opening price of the red candle significantly surpasses the closing price of the preceding green candle. Moreover, when the closing price of the red candle notably dips below the opening price of the green candle, the pattern’s reliability further solidifies. Both these conditions were met on Thursday.

If this bearish signal indeed holds true, the next support level for the Nasdaq 100 lies at the 100-day moving average, positioned around 14,376. Looking further ahead, there’s the 38.2% Fibonacci retracement level, calculated between this year’s highest and lowest points, standing at 13,929.

Right now, investors in the tech sector, tracked by the Invesco QQQ Trust (NASDAQ:QQQ), are focused on the imminent Jackson Hole Economic Symposium. The pivotal event takes place on Friday, with Fed Chair Jerome Powell set to speak at 10:05 am.

Buy put

Buy call

Buy put

Buy put

Buy call

Better to wait for Powell’s speech to confirm a direction before taking the trade. Manage the sizing with stops and scale down to enjoy the weekend. To be sure, other investors remain bullish on the tech sector as their hopes for a resilient economy remain intact.

Please click Like 👍, Comment 💬 & Repost 🔄 this article found at the bottom of your screen. Follow me for the latest news, trading ideas & strategies to ride the market daily with profits! 🤑

@CaptainTiger @MillionaireTiger @TigerStars @Daily_Discussion @koolgal @Andreana @KylerLee @Aqa