Two More "If This Happens, Do This" Trades

The market is heating up as short sellers get squeezed. Be Prepared.

This morning, I issued several conditional trades based on how the market’s bounce develops.  To recap, I suggested that we should be ready for either a continued rise in the market after the recent crash, or a failure of the current bounce and a resumption of the down trend.

I also noted that here’s what I’d like to see before moving back into stocks aggressively:

·        An improvement in the market’s breadth;

·        A stabilization of bond yields; and signs that smart money is moving back into blue chip companies which are full of cash and command their business sector.

The take home message is that, as traders, we should prepare for any potential outcome and act accordingly.  This is best accomplished via the “If this happens, do this” principle, and is best manifested by conditional trades – those where the entry points are predetermined via technical analysis and where the trade only becomes live if that entry point is tripped.

You can catch the entire post here.

As the day has progressed, I am encouraged. This is not so much due to the market’s bounce, but because of the areas where the relative strength in the market is being displayed.  As a result, I am adding two more ITHDT trades.

The new trades are directly below.

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