Stocks are back up after one of the worst market days since March. Continue pressure on the global economy, another month of consumer confidence going down, debt ceiling issues, and rising inflation all seem to keep leaning towards more bearish pullbacks.
Tech was hit hardest yesterday, and continues to be the higher volatile sector. This is partly do too perceived over valuation of tech , as its performance year after year has seen companies like MSFT, GOOG, AAPL and biotech hitting new highs. The stocks have hit the 10% pullback already, and it seems like today they will bounce back, already hitting up to a 1% gain in pre market. However, this week is eerily similar to last, where tech was hit hard then bounced back by the end of the week. But when will the bounce back never come?
Yesterday, with the dropping market, I put on hedges for my credit spreads and outright long/theta positions buying puts outright and legging into bearish credit spreads as well, covering the cost of my puts so if the market did bounce back I wouldn't have to eat the premium. This also gave me a nice downswing middling of 40 points, where I would make 2-3k depending on the settle price.
In markets like this, it is best to keep nimble, not take on too large of positions overnight (if not hedged) and always be willing to unwind or double down onto a position when the momentum is correct.
I will continue to look at #aapl , #dash, #goog, #mrna, #nvda, and #tsla. If you are looking for a high momentum stock swinging both ways on the day, take a look at straddling or creating a credit spread on #mrna as the stock has been moving over 7% in either direction of the week.