Editors Note:

They say never short a dull market because they have a habit of exploding higher. If that is the case, we should have a huge breakout ahead because the last three days have been really dull. Unfortunately, the breakout from a dull consolidation phase can also come in the form of a breakdown. The dull period occurs when nobody has any conviction. Buyers are not pushing prices higher and sellers lack the conviction to push the market lower. The stalemate can last for days and makes everyone nervous. When a direction finally appears, it can produce a significant move because everyone waiting for a direction jumps on the trend. Be patient. There is more than likely a buying opportunity in our future.

 

New positions are only added on Wednesday and Saturday except in special circumstances.


NEW DIRECTIONAL CALL PLAYS

No New Bullish Plays


NEW DIRECTIONAL PUT PLAYS

QQQ - Nasdaq 100 ETF - ETF Profile

Comments:

The Nasdaq posted only a minor gain of 3 points and the rest of the market was weak. There is a good chance for weakness later in the month so I am keeping this recommendation.

Original Trade Description: Aug 1st

Invesco QQQ is an exchange-traded fund based on the Nasdaq-100 Index. The Fund will, under most circumstances, consist of all of stocks in the Index. The Index includes 100 of the largest domestic and international nonfinancial companies listed on the Nasdaq Stock Market based on market capitalization. The Fund and the Index are rebalanced quarterly and reconstituted annually. ETF description from Invesco.

The Nasdaq Composite fell -329 points from the closing high on July 26th to the 7,604 low on Monday. The rebound from Monday's close has totaled 67 points. That is hardly a bullish buy signal. With the tariff headlines about to heat up and Aug/Sep the weakest months of the year and the Q2 earnings cycle peaking on Tuesday with Apple earnings, the most likely scenario is further market weakness in the coming weeks.

Rather than buy a put outright I am going to use an entry point trigger. I only want to buy the put if the QQQ declines.

With a QQQ trade at $180.50
Buy Sept $175 put, currently $1.72, initial stop loss $182.50.