When XLK continued to show weakness, I ran a Breakout calculation on shorting QLD on a Breakdown-on-volume. The results looked positive. However, I cancelled the order later on as the bounce seemed to attract good money. I was afraid of a strong bounce such as has been commonplace over the past few weeks.
Poor decision in hindsight!
Note that over the weekend and overnight, the NASDAQ seems to be bouncing back to the short zone.
I would not be surprised if there was a strong oversold bounce today.
By the way, there is now a new Volume Surge option available in the stocks selection section.
The portfolio is now 10% short. Not much risk. It is still a "wait and see" situation.
The trade ideas for today are below. There are interesting ideas on both sides of the market.
EXPE releases earnings in a few days. Hence, it is a very dangerous trade. If you want to buy the stock before earnings, the best is to use options:
1. You only invest the money that you would be ready to lose on a stop loss. For example, if you use to invest $20,000 per trade with a 5% max stop level, then you only invest $1000 in a call.
2. You select calls that are at least three weeks away, because the closer you are to the expiration the fastest the option will shed value due to the time decay.
Please note that this earnings season, nasty surprises have occurred on the long side, meaning that quite a few companies have missed or guided lower, which resulted in an extreme price drop. Hence, an option play would probably work better on the short side than on the long.