Quick Update and Perspective

Following the suggested the stop loss on the QLD trade, we would have been stopped out at 71.00. I will continue to track this trade because the purpose of these trades is to use a short term model for entry and exit signals. I suggested entry on a recent oversold signal, however we have not gotten back any where near an overbought signal which would be the exit. So I will post an exit when the model gets back to overbought. As a matter of risk management though, I tend to use stops, and suggest stops on stock trades to eliminate guessing games when possible.

The problem comes when you get stopped out and then that very day or the next you get a new signal to take the trade, but you are too afraid and you pass only to miss a good opportunity. So, with experience and consistency comes the guts and wisdom of when to holdem and foldem.

Also, there is a system I have read about on using highs in the VIX to identify timing of market reversals. If the VIX makes 12-15 higher highs off a bottom in the VIX, that usually is a very stretched market and it has rebounded in the past. We are at a 14 day high right now, so past history would suggest being on the lookout for some degree of market reversal. Even after the huge selloff in the post 9/11/2001 disaster, the market reversed after a 15 day high in the VIX. So there is precedent that it may be useful even in bear market environments.

I am still holding the QQQQ call options waiting for a potential market advance to take the short term model to overbought before selling.

Move the stop loss on SRS up to 96.23.

Pete