QQQ All-time highs, NFLX not holding it back

QQQ All-time highs, NFLX not holding it back

We have what is known as a situation.  The QQQ is making all-time highs as is MSFT and AMZN, GOOGL and FB today.  NFLX is not holding things back even though this morning looked pretty ugly for big tech.  If one goes back to the Dot Com era things really moved.  AMZN has a crazy multiple but the other big tech stocks are not close.  I am not including AAPL in this but the multiple there is hardly nuts too.  What we have is a market moving and moving up.  If NFLX down 10% cannot hold back big tech, not much else will.

That brings me to trade ideas.  Bad news can come in the short term if we get a miss or two on big tech earnings, which can happen.  We got this similar trend on the last few earnings cycles as it shows no signs of abating.  Rallying on lower vol is usually pretty bullish. So what to do what to do?

I think we got shown the way this am on the cycle will play out.  The sharp dips on a bad earnings surprise are followed by the crazy rallies.  Buy the QQQ puts shorter term, say Aug03 175s and buy the calls a bit longer say Aug 10 or Aug 17 182s after the tech earnings cycle is over.  If you subscribe to the Vol Newsletter, we can show you had to cut the theta to tiny dollars.   More important is the concept of managing risk here.  You can get long selling puts or you can get long buying calls so with the low vol, I choose the calls.  You can learn more at our Fixing Terrible Trades webinar on the 29 th of Jul. 

Disclosure: positions in AAPL, FB, GOOGL, MSFT and QQQ

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