QQQ Trade Ideas Week Ahead

Continuation of speculation?

Over the last month I have witnessed some of the biggest moves in tech stocks since 1998 and 1999. I was telling Kerry that I remember seeing AMZN moving 10% plus in a day in 1999. This is when I first got into the investment industry. META’s 23% move on February 2 reminded me of the late 1990’s.

What drove markets then is not much different then what has driven markets year to date. The vehicles are different but the underlying reason isn’t.  Today the vehicles are Options. Available to everyone, options are cheap. Affordable to most.

TESLA is up 75% year to date.

Apple is up 23% year to date.

MicroSoft is up 7.83% year to date.

META is up 49.54% year to date.

Google is up 17.57% year to date.

Nvidia is up 47.40% year to date.

Are these returns sustainable?

From my point of view this is driven by enormous speculation using short duration options known as Zero Days to Expiration options. Options that expire the same day they are bought.

What has driven this market up can easily drive it down. We saw a glimpse of this on Friday.  What will transact in the coming week, only time will tell.

What I will be watching the 0DTE options of the top 10 holding in the QQQ’s. More put volume vs call volume consistently could be a sign of a pivot to the downside.

Below is a chart of the NDX.  The NDX is the NASDAQ 100 which is what the QQQ ETF represents.  Three key indicators that I follow are in the overbought territory.

Until tomorrow.

Live Loud!

Trent

Disclaimer

The information is not advice or a recommendation.