Okay, so if I am going to trade puts to take advantage of what I see as market weakness then I can trade SPY, but I would probably do better to pick a stock that is showing more weakness than SPY. When I look at recent history from the recent start of the hard drops (basically 1:00pm on 10/12) some high-volume stocks went down more than others. The ranking is as follows:
TSLA -4.9%
NVDA -4.4%
META -4.3%
AMZN -3.0%
GOOG -2.0%
AAPL -1.8%
MSFT -1.6%
SPY -1.2%
So it appears that I picked correctly when I used TSLA. I thought they looked weaker before the downdraft.
I could keep trading TSLA, and I may do that, but I’m not yet completely sure. There are others that look like somewhat better setups. NVDA and META had similarly large declines, but both of these look much stronger over a longer term (about a month). Now it could be that NVDA and META went down more because they went up more (the higher you fly, the harder you fall) and maybe they will keep falling harder if the market goes down, but I think that I would be more likely to try to catch them on the way up if we have another reversal upward. I’m currently thinking that we will set a lower October low before we reverse for a significant upside. That is, unless I’m completely wrong.