Yes, I am leaning towards a bounce starting tomorrow, whether or not the market makes one last thrust down about 5-8% below today’s lows I do favor a significant rally this week, most likely starting either off today’s lows or sometime during the regular session tomorrow if we take one more thrust down.

I have updated LQD in the two videos published since this post & also added some comments in a reply to @manuj in this comment thread (above) that you might want to take a look at.

I can’t tell you whether you should close the trade out or not but I can give you my thoughts. I do think that LQD is heading much lower in the coming weeks to months but it could certainly continue to rally in the near-term, especially if my expectations for a rally in the stock market tomorrow & quite possibly over the next few trading sessions pans out.
While the stock market could certainly go the other way, should it rally then LQD has a decent (but not very high) chance of rallying although if so, I don’t think it will rally as much as the stock market… not just in percentage terms but more so relative to the preceding drop (i.e.- the retracement of the previous drop). I’d also put decent odds that LQD doesn’t rally if the stock market rallies this week for the reasons that I stated in previous videos (a stock market rally is likely to trigger a rise in investment-grade corp & Treasury bond yields which would bring prices down.
Basically, I don’t see enough in the charts or fundamentals to modify the trading plan on the current LQD short trade & think it is best to leave the stop as-is for now although if you are risk-averse, there’s nothing wrong with using a more aggressive stop. Sorry I can’t give you a firm “YES, close your LQD short” or “NO, hold on & it will pay off” answer but swing & trend trading a bear market required unusually wide stops & high levels of risk tolerance which comes with above-average gain & loss potentials on the trades. Most importantly, do what feels right for you. The old adage when it comes to investing or trading is: Sell your position down to the level at which you can sleep at night.

Randy, with you closing out QQQ can you please update LQD? Thank you.