So far today we have exactly the kind of confirmation from a candlestick perspective that should lead to some further market strength. We began the day with a large gap up, which I had mentioned last night was a good thing in this case. Also, the market has easily mananged to power through the first hour highs which bodes well for the rest of the day.
From this point there are two potential ideas I have for exiting this trade. The first is simply to exit when the short-term model becomes overbought as it may by tomorrow. The second is to recognize that some further market strength is likely over the next week or so, and set some limit orders to try to get out as prices meet key resistance. I think strategy #2 will make the most money in this case, but there is added risk in holding a little longer. Since this is my blog and most people will prefer to make more money than less, I will give directions on strategy #2 unless/until I see some evidence that the target area I have outlined in recent posts will not be attained. Since, as of right now at least, the QLD entry I suggested got us in only a few cents off the recent lows, we have some cushion to try for a little "extra" profit and still be unlikely for the trade to go negative.
So for now I recommend placing GTC limit orders to sell QLD at 26.00.
Pete
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