Bearish Indicator Just Triggered for Nasdaq!

Last 2 Times This Happened the Markets Pulled Back

If you're looking to take your investing knowledge to the next level, make sure to check out our latest free courses offered on mainstreetwolf.com!

Market News and Short-Term Predictions

While I don't think a crash is imminent, a healthy pullback may be on its way soon.

Mega tech has continued to rally hard this shorter week pushing the markets higher through today. We have reached a technical indicator on QQQ (Nasdaq) which is not often hit. The RSI on the weekly chart has hit above 70.

The last two times that has happened within the next couple weeks we have flatlined or pulled back.

I actually ended up trimming 10% across some of my mega tech positions after absolute wild runs year to date. Could they continue running? Absolutely, and why I'm not selling out of them completely. I am looking to rotate some of the capital to stocks that I think are valued at more of a discount and spreading risk out to different sectors (and a new position).

Lessons to Be Learned

I saw a lot of speculation back in the markets this week. With NVDA hitting all-time highs and the hype around AI, the ticket symbol AI got some buzz too.

A company that has had a history of changing its name to whatever the recent buzzword is about (used to be C3 Energy, then C3 IOT, and now C3 AI), isn't necessarily the best play in the AI space. Regardless, with the ticker symbol made to attract day traders and speculators the stock had nearly tripled in a month.

After earnings it dropped back down to the $30 range, but this is a stock that isn't trading on any type of fundamentals. It is volatile and the recent price action is more similar to a pump and dump. The main lesson is that while AI will create wealth for investors, but when a stock triples in a month because it has a great ticker symbol...that is more like gambling than investing :)

Options Trading Portfolio

Closing Trades

I ended up closing out my SPLG short put ($48 Strike) for a $45 gain and rolling up to sell a $49 strike SPLG put. I also rolled up my covered call on 100 shares of SPLG from $47 strike to $48 strike for a $45 debit. Now if the position gets called away in July, I would make $190 on the position with a new cost basis of $46.10 on the shares.

If you don't want to miss out on the following: weekly buy/sell activity in the stock/option portfolios (Excel Spreadsheet with full details), real-time alerts through Discord, Livestream Q&A, and access to premium courses & tools, make sure to check out the premium membership.