Category Archives: QQQ

VIX Chart

Is the VIX Flashing a Warning Sign?

For the entire length of this 3 month rally, the upward steps have lingered under 1% and usually under .5%. Only in the last 10 days has the VIX started to signal caution. The VIX is now solidly over 20 and approaching it’s recent high of 22.

Yesterday at the close we saw an unusual large pop at the close, and today we saw AAPL collapse 25 points in 5 minutes. AAPL lost it’s luster very quickly today, and that’s worrying… Euphoria is the word I’d use. Everyone has AAPL, literally, so sell. It’s hard to write that, given how popular, rich and well regarded that stock is. For how long the euphoria might continue is hard to say, but I read here that they accounted for 90% of the gains for the NASDAQ in yesterday’s trading. Strange. Buy some protection if you’re long AAPL.

VIX Chart

Option expiration is coming up this Friday, and tomorrow’s PPI and claims numbers risk to add fuel to this VIX fire.

Consolidation Spread Idea

I’m seeing (imagining) consolidation and some interesting ranges appear on the charts. The chart below is the $QQQ. I’m looking at a couple of short strangles or iron condors for August expiration. The volatility is high and there’s a lot of traders who probably disagree with this range bound idea. At the same time the bears would say we’ll retest the lows (which keeps me in my range).

Will we do it by the end of next week? I think it’s worth putting on a short strangle here maybe with some protection on the outside.

Strong names like $AAPL could easily break out to the upside. Normally I like to trade $AAPL in a range, but I’m staying away from it, in this case. Apple fanatics have tasted 400 so there’s a tight spring loaded here…

Selling $QQQ 50 puts and 55 calls.