The opening price of SDS yesterday was 73.18, which I will use for blog calculation purposes. From a trading standpoint, with this morning's sharp decline, it would make sense to place a stop loss at breakeven or slightly better. I will suggest an exit when the short-term model becomes oversold.
As a side note and market analysis lesson.......
This morning's price decline looks like it may get even more severe. When markets are range bound and trading with relatively low volatility, new directional moves typically start with explosive price moves. So if we see a decline larger than any day in recent weeks (say 5% or more), then that would be additional evidence that the market is indeed breaking down and very likely to fail on this rally attempt.
Once I feel that we are "in the clear" as far as a failed market rally, I will post a suggested protective stop loss for the BGZ trade. No changes yet, though.
Pete
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