"Virtue untested is no virtue at all" – Milton
The same can be said for support lines and yesterday we tested two of them as both the Nasdaq and the NYSE tumbled down to EXACTLY the levels we predicted they would hit last Thursday. See that post for the full explanation of what happened yesterday (even though I actually wrote it last Thursday morning) but the key note, which is our action item for the day, was in the 3rd paragraph, where I said:
We are NOT expecting to test 13,600 though, that's just the worst-case, where we would be BUYBUYBUYing on the dip but we HOPE to see 13,800 tested so we can get over it and consolidate for a real move (not a spike) over 14,000.
So let's not call it a shocker when I put out our morning Alert to Members and included this quick cover note for our portfolios at 10:34:
Dollar coming back now – 81.43 so good time to cover. SQQQ March $34 calls at $2.20 are just .50 of premium with SQQQ at $35.70 and that's very fair. Good ones to keep an eye on if AAPL fails $450 or the Nas can't hold 3,175 (right on the line now). NYSE 8,900 is a good confirmation spot too.
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