Key Technical Level Breached: How To Play It

1,294.50 on the S&P 500 was just breached, and stocks are really starting to sell off now, with the indexes adding to losses. Traders were watching this key technical level, and once it was breached, it induced further selling. We are in a correction, there is no doubt about that, and traders can play this a few ways. Shorting any ramp ups in the indexes, such as buying the ProShares Ultra Short NASDAQ ETF QID or the ProShares UltraShort S&P 500 ETF SDS could potentially be positive trades for the time being. Shorting high beta names as well should also be positive in light of the technical analysis breach on the S&P 500. Names like Baidu BIDU, Apple AAPL and Google GOOG are likely to fall in line with the indexes as well The next technical level on the S&P 500 is 1,275. The NASDAQ 100 ETF QQQ puts are very active this morning, having traded 22,500 contracts for the July $51 strikes. This implies a drop of 10% by the end of next month.