Trade Idea: QQQ Puts

I'm at full size with a SQQQ (3x short QQQ) position in the trading portfolio, it's down -4%, but that's nothing for a 3x leveraged ETF.

I'm looking at the Q's which look horrible here, if I had the room I'd most definitely enter an SQQQ long position, but as I said, I'm at full size.

I've decided I'll put on a March monthly QQQ put as all timeframes have connected in a significant negative divegrence.

As I said a couple of times this week, duration is going to give way to volatility, if you recall 2013 the market went up nearly every day but by 0.10% or less, that was duration, volatility is the 1+% moves, except volatility grows and it is a notorious sign of the end of a stage and the start of a new on. You may recall how stage 2 uptrend ends with a massive volatility move nearly straight up that looks VERY bullish, but it's a sign of a top 90% of the time.

In this move the head fake break down was stage 1, the move up the last week was mostly stage 2 and the last 3-4 days have been a large stage 3, decline is stage 4. I don't know how much volatility will increase by, but it will increase. In 1929, the first 4-days of the initial drop lost 25%. As you know I think the SPX 200-day is going to be an initial target, but unlike the 100-day (NASDAQ 100) which was support, I think the first move will be below the 200-day. I can't believe they'll use the less popular 100-day for a head fake move, but will let the most popular 200-day just slip by with no gaming. We will have to see if there's accumulation below the 200 day to see if there's a head fake move or what kind of head fake move, but that is where I think the next leg is heading so I'll be entering a QQQ Put, March; I'm not sure of the strike, but I'll post both the actual position and the charts next.