The easiest trade is sometimes the hardest. If the dominant trend has indeed turned down the countertrend spikes should be used to add to short positions, and the spike declines used to take those additional shorts off. Yes, easier said than done. This SQQQ chart offers some perspective. Note how price spiked higher (market declines) and is now retracing part of that advance. The price range between 36-40 is ripe for a reversal back in the direction of the dominant trend. Once inside that 36-40 window consider adding SQQQ calls on any subsequent advance above the window, i.e., above 41.00. It would take a breakdown below 35.00 to negate the pattern. The Feb 18th $35C is up 300% and has been as high as up 650%. If out, or if adding, the Feb 18th $42-$45 calls are in the sweet spot, with Feb 18th $50C a speculative highly leveraged bet on significant new market lows before expiration, 24 days down the road. SQQQ high on Monday was $48.08. SQQQ - Daily w/Fibonacci Retracement Window SQQQ - Hourly Note: The low on today's opening hourly bar barely grazed the top of the reversal window. Since then the market's upward momentum has waned. With all of the news that's coming later today, in particular the Fed and TSLA earnings, it's hard to say whether the retracement is already over, but it may be. If SQQQ breaks above $48, it's likely going to $60.
