Important notice: On the long term we still don’t know how the virus affected the economics of major US companies including Apple, Amazon, Google etc. The longer term impacts could drive the Global Tech Sector even lower so limit your exposure and consider cash as a position. Current market levels near 2600 on SPX but more downside can come later this year so if you are long term holder, consider a non market related, well balanced portfolio.
$SPY – S&P ETF
$SPY – (SP500 ETF) As lots of tech is broken, I suggest you consider trades in the indices or etfs. Current market structure will give us an opportunity to see the market open near 2600 on SPX and SPY or SPXL could be good vehicles to play the bounce. The question is, will it be a short-term bounce of something that might last. How much worse can it be:
Technical trades versus 259, 254.50 or 252.00 are spots to consider. Futures might give us some clues. I suggest using no more than 0.5% of risk per trade in this scenario. Its time to get tactical as we have the long term supports near 253 and pivots noted in the chart. On the futures we are down 23% from the highs and this is 2600 is the measured move of the first wave from highs to 290 area. Lots of traders will stuck their orders so stay aware of the market levels on intraday. Snap down into 25xx area is still an option.
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Remember: These are not trade recommendation to buy or sell securities. Always do your own due diligence and trade at your own risk.
Never chase a trade once it is too extended from the entry zone.
Never risk more than 1% of equity per trade.