While I'm on hiatus through June 15, I wanted to weigh in ahead of Wednesday's U.S. interest-rate decision. The tone should be a key tell as to whether the current dip in tech should be bought aggressively or whether it should be bought in bits and with patience.
My strategy on Friday was to focus on call options for Apple (NASDAQ:AAPL) and NASDAQ big caps through QQQ. That will continue to be my strategy until some stock-specific signals emerge regarding the other big-cap tech stocks. Facebook (NASDAQ:FB), for example, may have already bottomed with a bounce off its support at its 50-day moving average (DMA). I already have a hedged position in NVIDIA (NASDAQ:NVDA). Overall, I remain encouraged by the relatively healthy trading action outside of tech, particularly from the financials.
That said, I took advantage of the rapid return to an extremely low level of volatility to load up on call options on UVXY (as a small hedge). Just as I did last week, I plan to take profits very quickly if they come, given my outlook for an overall low volatility summer.
The percentage of stocks trading above their respective 40-day MAs will be the starting point of my analysis.
I am still cautiously bullish.
Be careful out there!