QQQJ Charts 2

One Last Bear Rampage for 2022: Semiconductors

Looking at the ascent on some of these, I think I might go 10 percent or more OTM on options. My expepctation is they will descend faster than they ascended. KLAC gained 57 percent from low to high in barely more than one month. My expectation is it will trade at a new low, which would require a minimum loss of 365 percent. TSM doesn't have the greatest chart, but it gained 40 percent in two weeks. Likely to lose it all as fast, if not faster.

MPWR

I think this could go to $100 per share.

Bonus Shorts

I cut the screen to 20 percent higher volume. Another chemical company was in the mix:

ALso: SHOP,NVDA, MPWR (I sold my puts on Thursday) and AMD. Also HRL, JBHT, TEAM, PSNY, HUBS, ZI.

Waiting to Short Again

I was slow on the trigger yesterday. I expected ES to pop above 3930 area, but waited too long for calls. I'm waiting to re-enter on the short side. This is a bear rally. The payroll report was perfect for this setup. Stocks are rallying, but bonds aren't because employment was better than expected.

I sold some September puts in MPWR on that sucker's plunge, and was stopped out of a weekly (next week) put position in Meta, which gives me a nice big cash position of about 40 percent (MPWR rained, down nearly 20 percent in 5 trading days).

Bonds have already started sinking and stocks too, so maybe this isn't the rally. If not, another scenario is stocks plunge early next week when all the vacationing traders and managers realize they're two weeks late to the next wave down. Then maybe a bear rally. Or not. If I'm right about this bear, at some point the market will relentlessly sell off like MPWR did the past week.

I will be focused on bonds. As long as they stay down, I will be shorting with very high confidence because even a mistaken entry too early will end up paying off. Whereas if bonds rally, a rally could potentially get ugly in the short-term for bears, ugly enough that you don't want to short too early.

Hawkish Words from Fed Sinks Rally

The major indexes closed below their long-term support lines from Jan-Feb. The unemployment number for July is tomorrow morning out on Friday.

My trades for today: closed TLT. Closed AAPL and AMZN shots, then reopened AAPL higher in the day. Shorted SPY and IWM with 1 DTE puts midday, closed near close. Have XLE weekly and monthly puts. I don't discuss because they're an afterthought, but still holding all my gold mining calls. I like NEM $55 Nov as a kind of conservative trade. I did a small gamble on SBUX earnings, didn't work out so far. I also bought MPWR puts for September, way out of the money. Ended the day with a lot of cash. I'll post when I think it's all clear to short with reckless abandon, but for now I still expect two-way action in the market.

Chips Top, Maybe

SMH reached the lower end of my target range. MPWR surged on earnings news. The latter is heavily exposed to China with sales, plus it's entire supply chain bottlenecks in China with chips made in Taiwan and South Korea, along with those made in China, flow through Chengdu. MPWR does not have liquid options. If SMH gets to the $250 to $255 area, about a 50 percent retrace and at the late April high, that would be where I'd be looking to heavily short assuming nothing has changed with the macro picture.

Saturday Dirty Two Dozen

What I like about my screens is that I keep turning up the same stocks and they're also stocks I identified myself through laboriously checking sector ETFs. This screen I used some volume and market cap to lower the list to around 700 stocks with unusual volume on Friday, then I put on two criteria: one-month loss of at leastt 10 percent and RSI above 50. Ideally there are some candidates for reshorting. One of them I posted on Thursday or Friday already. Here is the entire list that he screen threw out, 15 here and 9 inm the next:

An Old Target Bounced

One I shorted before. Not in it now, but maybe time for another go around...

Screen Part Six

Still going strong with setups...

Most Targets Broke Down

Still waiting on XLY, but ALGN, CTAS, MPWR, INTU, RH, MSCI, POOL, IDXX all broke down. Usually this is when the football gets pulled away. I added CMG and ISRG on possible breakdowns. NFLX also broke down. Aside from these, I see a lot of bearish setups. Mainly wading through them looking for the best setups. There are so many in the tech sector alone that no doubt many are out there.

The two next shoes might be SMH and BTC Bitcoin.

UUP tagged its 50-day MA today. I don't think the dollar matters much for the stock market right now, but down would be better for inflation trades and tech weakness, and up better for more general bearishness.

I'm going into Monday with guns blazing, but I'm here for the day the market doesn't bounce. There is growing bearish sentiment, but a lot of its is cautious from my reading. Looking for a 10 percent pullback tops. Fearful of the Federal Reserve, jawbone or policy shift. I don't sense much confidence or risk taking on the bearish side. History and support levels say maybe this dip was it. There's a case for a bounce and there have been face-ripper run ups from the support area the Nasdaq bulls defended today. But...if that support doesn't hold...there is nothing but air below. The risk-reward is heavily skewed in favor of bears thanks to VIX remaining suppressed. the 10-year yield held its breakout too. If the Fed opts for dovishness, they will probably ignite crude oil and the 10-year yields, and then the Nasdaq and all the ARKK trash will walk into an empty elevator shaft.

Bounce or Breakdown

A bunch of stocks I've covered before and have puts on many of them. I included a bunch of cloud stocks that I don't currently have puts on such as former targets HUBS and COUP, but I wanted to highlight their breakdowns. I have no idea which way the market will break. Previously the horizontals some of these are hitting offered support. HUBS and COUP are beaten down and could bounce. My only caveat is that when the market finally decides to have a sell-off it is going to join these bear leaders. The market is bouncing right now after hitting these support areas, I see a kind of unity, all-one-market across the charts. Even stuff going up like XLE is at resistance, and I've tossed that in here. Also a channel play on NWL. Long story short" every time we get to this point, dip buyers pour in and bears get hosed. Sometimes there are breaks like in late November, but even those are reversed. It only needs fail one time though, and that's the time the bears will feast, and the profits I will make on that break will dwarf whatever losses I take in the here and now.

Netflix also broke a long-term line.