New QLD Trade, GLD put options

I am going to recommend a trade on QLD that is slightly different than the past ones. The past ones were really recommended at low points on short-term oversold conditions. I am going to suggest using a buy stop to buy a mini breakout that could go much further if this market does in fact follow through to the upside.

For entry use a buy stop order of 72.88. Then use 68.63 as a stop loss. I will suggest using a trailing stop technique on this one to try to capture the bulk of any upward move. I will also continue to recommend short term trades as the model suggests.

I am going to track a trade on GLD as well for the blog. I will use the August 93 put options. The entry price I will use is 2.25 which is today's closing price. GLD is right at 93.00 right now, so it does not have to move far to break even. I had bought puts on GLD early this month and GLD went exactly the wrong way. However, it is a rookie mistake to throw all your analysis out the window and lose sight of the next opportunity. Today the daily MACD made a bearish cross and all the other basic technicals I look at had already given what I use as sell signals.

To make clear, I am not in this trade as of today, so please think through this trade on your own.

As far as exit strategy on a trade like this, I really expect a trade like this to make in excess of 100% profit. That is good because any loss on a short term at the money trade will tend to be substantial. I would sell the option for a loss if today's high is broken before expiration.

Pete