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Friday, April 15, 2011

QQQs Looking Vulnerable To Downside

- AAPL stock has seen lower lows and lower highs recently, setting up a pattern that rest of tech market could follow.  QQQs short-term (11-day) indicators are bearish, while mid-term (22-days) are still in neutral territory.

- Fair Volatility Estimate indicator's value for QQQs are at 17.98 in intraday trade 4/15.  IV Index mean of QQQ as of 4/14 close was at 17.12, and is probably lower today.  Should premiums come down Monday morning, I would think it would be a good time to play QQQs to the downside.  Perhaps, buying the May 57/53 put spread 1x2 for under 0.60 would be a good strategy.

- As for SPY, it is expiration day and the April 133/130 put spread bought for 0.30 is still in the money with SPY trading at 132.3 as of mid-day, but not by much.  Admittedly, however, recommending to buy VXX even under $29 on April 4, resulted in small loss.

- FVE indicator is at 16.3 as of 4/15 intraday, which remains significantly above IV Index mean of 14.5.
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