NAZ 100 model wildly oversold. if you are a contrarian such as i am, a few probing trades on the long side is irresistible here if the pullback this morning is contained. . . . So while writing this I missed the pullback, but i'm on it at where the ndx closed last night. must not get greedy. this has become a traders' market, warranting smaller positions and taking gains (one hopes) more quickly than in a trending market. money management makes all the difference. 1/4 to 1/2 percent movements in your underlying index should be secured with sell stops; overnite positions reduced.
with that said, the risk-reward on the long side remains terrible and by no means has this pullback run its course. i intend to take larger short positions than long positions for now and will have a much lower tolerance for long trades going south, with a higher tolerance for short trades that are showing losses or paring gains.
case in point: qld just gained .57% in 20 minutes: i'll let them take part of my position. we'll see if the ndx can go higher. i prefer the sso (2 x spx) because it is not as volatile, saving some emotional trauma when i get it wrong, giving me the ability to stay with my positions instead of kicking the dog and closing out at the exact turning point, which i have certainly done on frequent occasions (though i don't really have a dog to kick).
hmm . . . the ndx has now given back half its gain. if it can hold a higher low here, should i take back what i just sold? no, don't get greedy. too much downside risk. if the ndx tacks on some more here, i will put on some sell stops and leave it alone until the final hour, which is always inscrutable, particularly on a friday.
at this point, i expect that if i hold any position over the weekend, it will be a small short position in the spx (sds).
qld coming back from a higher low,; can it make a higher intraday high here? if the index gets to + 25 today (4760), the sell stops go on for my remaining position.