Reversal of Fortune

The CMI gaves signs of closing out this profitable position, and if this downward trend continues the sell of the QLD will be Thursday morning. After the gap down this morning I closed the position finally respecting the 20% rule. This was a costly lesson of about -5%.

The YTD results are posted although the CMI is still open. No reason to think this is the next giant leg down. Any excuse to correct an over-bought market was in store.

The 20% rule states that a stop should be put close when the CMI gains 20% during a trade. This had occurred a couple of times last year but would have cause a trader to miss out on greater gains on at least one occasion. I'll have to add all the occurances up but this last trade appears to prove out that the 20% rule is worth respecting.