Expect a Rebound of Some Nature Tomorrow

I don't have anything new for tonight. For anyone wanting a good market recap check out Cobra's Market View link on the right.

The QID trade got off to a good start today, but the short-term model did not reach the oversold area so no exit was justified on that grounds. I wasn't thrilled from a trading perspective on the last hour rebound, but I don't know that it implies anything specific about tomorrow. From my personal recollection, I would say that tomorrow is more likely to gap up after that late day rally, but I don't have stats to back that up.

I will go into more detail maybe tomorrow or this weekend on this, but I think it probably would be best to sell QID at the next oversold signal (even if we could know the top was in) and look for a longer hold trade at the next overbought signal. If that scenario is what occurs, I will begin what I probably should have done for the last month from an organizational standpoint in suggesting a double entry on both BGZ (3x ETF) and a 2x ETF (QID, SDS, DXD) at the same time with the 2x ETF being a strictly short-term trade as is my blog custom, and the 3x ETF trade having a longer potential hold but with a stop loss at entry and hoping to catch a major market top and hit a grand slam on a large correction in the markets over the next several weeks or months.

As for the current outlook, I would expect a positive day tomorrow and no exit on the QID trade until next week at the earliest, and just be pleasantly surprised if the market falls further and generates an exit signal before the long holiday weekend.


Pete