Under the comment section below the OpEx Ramp In Effect post made earlier today, member @gaucho had inquired if I plan to modify the stops on the IWM trade, which at the time was flirting with the suggested stop of a close above 130.90. Although IWM has drifted back somewhat comfortable below today’s earlier high of 180.83 and after reviewing the charts of both IWM & QQQ, I do think that I would be prudent to suspend the stops on both of those official broad market short trades through the end of the day tomorrow (standard option expiration).
As always, each trader or investor should use stops that are inline with their own unique trading style & risk tolerance. Suspending stops on a trade is a bit unorthodox & not something that I often do personally & especially with the official trade ideas on RSOTC. However, after reviewing the charts of IWM, QQQ & SPY as well as the top components of each and still taking into consideration the risk vs. reward of being short vs. long the broad markets at this point in time, I feel that suspending the stops on both of these trades until next week is worth any downside risk or additional losses in addition to those originally accounted for when these short trades were first posted.
QQQ is only down by a mere 1.5% percent from entry with the Q’s currently trading at 117.70, just slightly above the suggested stop of a daily close above 117.50 while IWM is current down less than 3% from entry but still poised to close below the aforementioned stop of a close above 130.90. As these are broad market tracking ETFs, the risk of loss on any upside tomorrow is negligible (the broad indices very rarely rise by more than 3% in a single day). I will either reinstate the same stops or follow up with revised stops over the weekend.