Exit SSO Trade

The short-term model became overbought before noon today, but I did not have time to post earlier. SSO should be exited now. I will use today's close to calculate the return, but if anyone is in this, I would sell at the open tomorrow, especially if there is a gap up. Closing price is 61.69 up from 59.24 open on Friday for a 4.14% gain.

The recommended GLD option surpassed 100% gain intraday today but then reversed. Many of the commodities advanced today. The question now becomes, is this a real deal reversing attempt, or a sucker play (bull trap). I would certainly set a stop loss to lock in a minimum of breakeven or probably better yet 25% gain on GLD. That way, you are covered and can hope that this is just a fruitless bargain hunt that will be met with lower lows and bigger gains on the option. If you get stopped out, then you at least had not loss and can see if things are right for re-entry or if there is a legitimate reversal happening.


Past Trades using short term model:

QLD 4/9/08-4/16/08 = 2.87% gain

QLD 5/6/08-5/12/08 = 2.73% gain

QID 5/15/2008-5/22/2008 = 2.46% gain

QLD 5/27/08-5/29/08 = 6.40% gain

DXD 6/5/08-6/11/08= 7.6% gain

QLD 6/30/08-7/17/08 = 0.82 % gain

SSO 7/25/08-7/30/08 = 4.14% gain

Looking back at the past recommended trades, there was sometimes some intra trade drawdown, but you can see that every trade I have suggested has been a winner, so this is likely to be a valuable system.

Pete