With a large gap down indicated this morning, I just want to suggest as I did previously that if the market goes below Friday's low, that will be out of character for a normal market - it SHOULD rebound. While probably the most likely thing is for a big gap down and then buyers come in right away or later in the day, I believe this could end up in a big single or multi day selling panic.
I want to be part of that on the downside and I believe the risk reward is reasonable to enter at the open with stops corresponding to yesterdays lows in the inverse funds. The S&P 500 right now is projected to open around 105.00 which is below Friday's low. If trading SPY short I would have a stop at 109.50ish. I personally am going to recommend a buy on SDS with a corresponding stop.
New Blog Trade:
Buy SDS at the open and then place a stop at 34.50 immediately after entry. For better or worse this will be volatile, so make sure the position size is appropriate.
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