Because there is currently an open blog trade on QLD right now, here are my suggestions for anyone depending on these posts for follow up:
Place a stop loss order at 20.00 instead of the limit order I had suggested. Then if the market rises above the 25.34 level just sell it with a market order.
OR
Just place a market order to exit Monday morning, which is a fine decision based off the short-term model since it is currently overbought.
Since I don't have time to give a bigger picture post that I was planning on giving, here is a basic summary of what my thoughts are on what might happen......
I think the market is still in a developing "triple three" correction that should complete over the next several weeks and lead to another MAJOR decline in stocks. The most common type of pattern at the end of any complex correction is a contracting pattern (i.e. horizontal triangle or rising wedge). In those cases, the first leg up is usually the most powerful, with the next legs up losing momentum. If a horizontal triangle is forming right now, there will probably be more upside next week, but that may be the highest point the market reaches for several months. So be careful about any rash decsions to get back into the market on a long term basis even if things look great next week. If the market rises strongly into next week, that should provide a good bearish ETF trade entry. I would consider 82.50 on SPY to be a price level to get bearish at if that is reached by this coming Friday. I don't know if I'll be back by then or not.
Pete
nice big pic view of what your thoughts are on what's next.
ReplyDeleteon the other note, take care.
i elected to bail on this trade when it capped 24 on thursday, as it was already showing overbought then and I didn't want to hold into any big overbought gap + selloff on friday. Like pete mentions, you have options here; except for being red on this trade.
ReplyDeletein pete's absence, love to hear what other blog-watchers thoughts are and what they are doing next week, as the week progresses. i'll do the same.
I just took my profits today at $24.43. There seemed to be some resistance in Nasdaq so I exited. We'll see what happens from there. Nice job on the trade Pete.
ReplyDeletei'll 2nd that.
ReplyDeletehad a limit order in this morning for faz @ 38. medium pain this morning, as it can be a bit volatile; but the trade seems to have worked itself out in the afternoon.