Time 9:38

Trading Technique: Gap Down at Open...

Rule: If a stock we own gaps down at the open because of EPS news that disappoints (e.g. EPS below Est., EPS ok but Rev. below Est., EPS & REV. good but guidance not good) then we sell 1/2 of the position as soon as the market allows and hold 1/2 for the first 1/2 hour. If the stock has not sufficiently recovered by 10:00 then we sell the whole position. If the stock goes to a new high during the day than we will buy the stock back because this happens very infrequently and is almost always a major buy signal.