Relative Strength Breakdown signals are longer term Chaikin trading signals. Thanks to the strong performance of bonds and decreasing probability that the Fed will tighten shrinking the outlook for bank, the NASDAQ, gets double whammied as high flying tech companies in the index face fast multiple contraction. Weakening relative strength and Money Flow give me more confidence that The Q's are likely to under-perform and already downtrending stock market in the next weeks to months. So today we initiated a short option spread trade
SOLD -5 VERTICAL QQQ 100 MAR 16 100/103 CALL @.92. We make money as long as the Q's close lower than $101.92 between now and expiration. The trade has a 71% chance of making money and a return on risk of over 40%. That's better than the 29% theoretical risk of losing money. Probabilities, the directional edge of Chaikin Analytics and better payouts relative to risk during periods of high stock market volatility truly put the wind at our back.
Exit Plan: We'll take profits when and if the spread decays to $.46 or a week prior to expiration, whichever comes first.
SOLD -5 VERTICAL QQQ 100 MAR 16 100/103 CALL @.92. We make money as long as the Q's close lower than $101.92 between now and expiration. The trade has a 71% chance of making money and a return on risk of over 40%. That's better than the 29% theoretical risk of losing money. Probabilities, the directional edge of Chaikin Analytics and better payouts relative to risk during periods of high stock market volatility truly put the wind at our back.
Exit Plan: We'll take profits when and if the spread decays to $.46 or a week prior to expiration, whichever comes first.
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