A serious reminder: both SP500 and Nasdaq fell below 50-day MA

OptionPlus
2023-08-17

$S&P 500(.SPX)$ it is seriously fell below MA50-day line. the index is expected to go around 4300 something, where is the high point in Last August.

$NASDAQ(.IXIC)$ fell below the MA50-day line last Friday, and the rebound in the previous two trading days was suppressed by the MA50-day line, which proves the above view of continuing to be bearish.

I would like to remind that investors should hedge and protect when the indexes bounce, even reduce your positions. If you want to hedge, options are better choices.

If you hold some stocks, the best options strategy is selling covered calls for your holdings. You can choice an OTM strike price to sell calls, that probably no to be exercised when the market is weak.

You also can buy put options to hedge. However, I personally don't recommend, unless your holdings are already very profitable. There are some cost to buy puts, so it is not necessary to pay extra.

Another strategy is selling covered calls + buy puts. The cost of buy puts will be covered by selling calls. But, a lot of popular stocks have relatively high IVs, means that the premiums of selling calls may not be able to cover the cost of buying put.

If you hold a lot of technology stocks, you can actually buy QQQ puts or SQQQ as a hedge. It should be noted that SQQQ is a reverse leveraged ETF, which is only suitable for short-term only.

Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.

Comments

  • cheeryx
    2023-08-17
    cheeryx

    Everyone keeps talking about the 50MA on SPY SPX being broken down.. okay, but how come nobody is talking about the fact the last time 50MA did get broken down, they had gapped it up $10 the very next day

  • AugustineMac-
    2023-08-17
    AugustineMac-

    Sold the SQQQ daytrade for 20.1 in the AH. Very much more short than long. But tomorrow bulls catch a bounce.

  • zookie
    2023-08-17
    zookie

    To me, it looks like we are at the neckline and could bounce for a few days if no more bad news comes out.

  • fizzik
    2023-08-17
    fizzik

    Even Nasdaq is negative, QQQ is green, lol!!!!! So easy free money, simply buy buy buy~

  • jingli
    2023-08-17
    jingli

    Expected Qs to be up more than this today. Looking kinda weaksauce. I dunno

  • Bel8680
    2023-08-17
    Bel8680
    ok
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