This means that the Portfolio was slightly short at Friday's open but became neutral by Friday evening. This also means that if the shakeout continues on Monday, the long positions will compensate for loss in the short positions. Moreover, if the portfolio is neutral, there is no need to respect individual stops, so I do not intend to respect the individual stop losses if we have an opening gap on Monday morning. The Portfolio situation is what counts.
That being said, POT was clearly outperforming in a down market and I felt that I could afford to buy a long POT in a Friday afternoon weak market.
ADS closed below its 200MA, which usually is a bad sign. I still expect a general market bounce on Monday afternoon and hence will keep the position even if there is an opening gap below the stop level. In fact, it is better not to respect that stop if the objective is to keep the portfolio neutral; however, if it turns out we are in a confirmed downtrend, then I'll have to sell the long position(s) and lean more to the short side.
If the portfolio had not been in a neutral position, then I would have had to manage the ADS position, which now has a greater than 80% probability of closing at a loss.
The list of new trade ideas for Monday is below. I am mostly interested in buying FAF and shorting UPS. However, I only have one cash position available for now.
FAF boasts good earnings and has increased its dividends and share buybacks. We can see that buyers are continuing to come in even as the stock is slightly pulling back.
For UPS, I already commented on UPS and FDX earnings last week. The stock is shortable on a bounce.