I also moved the XLF stop, as Financials seem to be weaker than the rest of the market. The selling on MS is troubling. I do not intend to keep XLF over the weekend.
The overall portfolio risk is still low. Now is not the time to be bold.
The trade ideas for today are below. Nothing that I am interested in for now.
As a side story, we will soon be into earnings period. This means that we will need to be more cautious to trade names that are coming into earnings.
Yesterday, LULU was such a name. LULU was displaying a rather weak EV pattern. I therefore decided to buy a few puts. However, in the afternoon, LULU broke above its trend line on strong volume.
I ran the Breakout Calculator. The BC showed bullish results for the next days after a breakout on volume. I hence decided to sell my puts at a loss (in order to avoid a larger loss the following day.)
To my regret, LULU badly missed and the stock lost 18% overnight... Both the buy and sell decisions were rational, but still I missed the trade. I do not trade options on the Portfolio to make things simpler to follow, but I believe that buying call/puts are a low risk way to invest ahead of earnings, because losses are defined.The way to calculate the money to be put at risk on each option trade is rather simple: If I carry five positions on the portfolio and if each equity position should not lose more than 5%, then the maximum money that I could invest into options for each position is 20% X 5% of my capital = 1%