I was gone the entire day yesterday and returned to find that the market did indeed make a big jump and stopped out the QID trade. However, this is the first every objective time during this rally that the short-term model has become overbought at a lower high than the previous signal, so that should give confidence to enter another bearish ETF trade. As I mentioned in a recent post, one of my goals with this rally has been to get into BGZ somewhere near the top and go for a longer holding time trade with a big potential gain. However, I want to continue to post strictly short-term trades as well which are the bread and butter of the blog so to speak.
The indicator set-up looks good to great for a trade here, and with each passing day that the indexes don't make new highs, the more likely it is that a top has already been made for this rally. A move down into the 850's on the S&P would basically confirm that a top is in as it will create a larger and more time consuming correction than any little correction during the rally so far.
Please refer to the money management posts if you are unsure about how much you should to potentially devote to these trades. Treat them as completely separate trades.
New Trade Recommendation:
Buy both SDS and BGZ today with a market order at the open or as soon as possible during the day. I am not going to suggest a stop right off the bat so please treat this according to the "trades without stops" guidelines in the money management posts. I will suggest a stop on BGZ ASAP to cut down risk on that trade.
Pete
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