Short-term Reprieve Expected Over the Short-term. Introducing our New Strategy using OIH and GLD

Before I get to the market commentary I would like to announce a new strategy that we are initiating in our newsletter that uses the underlying OIH and GLD. The strategy, that currently does not have an official name, will be based on the same indicators used in the ETF Extremes strategy. We will keep our loyal readers abreast of how it is performing and our newsletter subscribers will be privy to real-time alerts etc. The strategy will not be available to auto-trade until we feel comfortable and confident in the strategy. This should be a wonderful learning experience for us all.  

As expected the seasonal winds were at the backs of the bulls today. All of the major benchmarks that I follow are now in an overbought state so it looks as though the upside potential will be limited over the short-term.

Be prepared for the possibility of a short-term reprieve as we move into the early part of next week. There are several short-term (1-5 days) bearish indicators that are currently hovering over the market which typically take a few days to sort out.

It was a busy week for me and I would like to apologize for the short posts this past week. I hope all of you have a wonderful weekend and please do not hesitate to email us of you have any questions or comments about our new OIH and GLD strategy.

Overbought/Oversold levels for June 1, 2007

• SPY -  77.0 (overbought)
• DIA - 81.8 (overbought)
• IWM - 78.3 (overbought)
• QQQQ - 71.8 (overbought)
• GLD -  70.5 (overbought)
• OIH - 60.3 (neutral)

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Have a great night!

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