During the past two weeks, as noted in the reports and blog, my oversold bounce trades have basically broke even. A waste of time? Not quite. I was confident the market would bounce at some point during the extreme oversold levels, and we got that today. My entries in SSO and DIG last Thursday paid off big. I am now up approximately $2000 in the DUG trade and $1800 in SSO. Thus, over two weeks of low risk trades, I have a profit of $4000 (partially taken and partially still in play).
My strategy has been to play a bounce but manage risk very closely, while always being in position for a big move to the upside. Now that the risk has increased and we are hitting resistance levels, I have exited the trade.
Note that we are still very oversold. However, I would like to wait for a breakout of current resistance or a pullback for new entries.
The T2108 is still very oversold: