I received a private email asking if a QLD long position could be interesting here, because of the slightly positive EV pattern on QLD.
I could respond by telling that the EV pattern on QLD might just be a sign of hedging activities. But in reality, the best is to use the BC and test the hypothesis of a long QLD.
The question is where to buy: here at the low section of the envelope or much lower in the green zone.
We can see that buying at the close with a 5% stop is rather acceptable.
However, if you have an opening down-gap below the close of yesterday, you need to wait for a reversal above the buy point before buying. This is what is in the stats below. Buying a breakdown below the entry price is not a good idea... and it is NOT what the BC tests! It tests a reversal after a break below the entry price.
Now, we can test a deeper pull-back, which indeed offers a nicer return. The only problem is that the probability to reach that level today is only 12%. We would need a general market flush and a momentum reversal. Maybe we would need Siriza to say that Greece defaults, followed by a statement stating that this was a misunderstanding.
The sensitivity analysis shows the buy range.
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