Back near short-term overbought state with strong overhead resistance.

January 31, 2008

I often follow the RSI (2) to determine short-term overbought/oversold extremes. There is still a bit of room left until the major indices I follow reach an extreme, but it will not take much to enter into that area. Tomorrow brings the highly anticipated jobs report so a positive report should certainly push the market into the aforementioned area. A higher open will also create a gap higher which would be another short-term bearish sign.

As I stated earlier the Nasdaq 100 (QQQQ) and S&P 500 (SPY) are a bit stretched at this point so my hope is to see a positive open to fade tomorrow. Will we get it? Who knows, but that is certainly my hope for a high probability set-up. If we don’t get that then I will be sitting on th sidelines once again to see how the market plays out. I want to see extremes!!! We get near it and then the market fades before the extreme officially hits. Hopefully, the situation I mentioned will come to fruition tomorrow.

Overbought/Oversold for January 31, 2008

S&P (SPY) – 62.6 (neutral)

Russell 2000 (IWM) – 66.0 (neutral)

Dow (DIA) – 66.4 (neutral)

Nasdaq 100 (QQQQ) - 55.4 (neutral)

We work hard to bring you our latest views, opinions and research on a daily basis. If you are a loyal reader and find our thoughts useful please show us your support by joining our newsletter service.

If you want to an in-depth, step-by-step look at how we trade our strategies purchase our acclaimed E-Book! With your purchase you will receive Two Free Months of our investment newsletter plus unlimited access to our Insider’s page enabling you to follow our strategies as you learn. What do you have to lose? Join today!

Filed Under Crowder's Daily Market Commentary ·

Where Now?

January 30, 2008

The market spiked higher after the Fed announced a 50 basis point cut, but the advance did not last long. Strong overhead resistance and short-term overbought conditions were too much for the bulls to overcome. Will we test the recent lows now? If I had to take a guess I would say yes. Just look at the technicals and you can deduct that the probability of a continuation of the move lower is probable.

Tomorrow will be interesting. The futures have spiked lower on several bad earnings reports. After hours SPY is currently trading around the 134 level and the low today was 134.58 so if the futures continue to hold te market lower into the open tomorrow I would expect to see the gap close and then the market begin the descent. Of course, no one knows for certain, that is just my feeling at this point.

Friday will most likely bring another wave of strong buying or selling depending on Wall Streets interpretation of the employment report so the move tomorrow could be muted after the first hour of trading in anticipation of the report. All I know is that I am very frustrated by the lack of signals in the ETF Extremes strategy. We get close to a signal and the market moves fades before we have an opportunity to get in. I hate to alter the strategy as it has made 113% since its inception roughly 22 months ago, outperforming the market by a mile, but as I said, I am getting a bit frustrated. Hopefully we will have a signal in the coming days.

Overbought/Oversold for January 30, 2008

S&P (SPY) – 47.7 (neutral)

Russell 2000 (IWM) – 48.2 (neutral)

Dow (DIA) – 51.9 (neutral)

Nasdaq 100 (QQQQ) - 35.9 (neutral)

Filed Under Crowder's Daily Market Commentary ·

Expect to see choppy trading and then fireworks

January 29, 2008

Not much to say tonight. As the market prepares for the upcoming Fed announcement tomorrow, I expect to see low volume and tight range-bound trading. The release is due out shortly after 2 EST and I expect to see some fireworks following.

As I stated yesterday if the market decides to continue the rally from today then we will want to watch the 1375 level (on the S&P) as the first area of strong overhead resistance. A move to the downside and I will be watching the recent lows.

Overbought/Oversold for January 29, 2008

S&P (SPY) – 54.8 (neutral)

Russell 2000 (IWM) – 61.3 (neutral)

Dow (DIA) – 58.8 (neutral)

Nasdaq 100 (QQQQ) - 36.5 (neutral)

Filed Under Crowder's Daily Market Commentary ·

Pivotal Week Ahead

January 28, 2008

This week could be a catalyst for the intermediate-term future of the market. With several major economic events (fed announcement, Jan. employment numbers) occurring this week plus a plethora of earnings reports we should expect to see volatility continue.

If the market decides to continue the rally from today then we will want to watch the 1375 level (on the S&P) as the first area of strong overhead resistance. A move to the downside and I will be watching the recent lows.

Unless something triggers a sharp move and an extreme I will most likely be sitting in cash until after the Fed announcement Wednesday.

Overbought/Oversold for January 28, 2008

S&P (SPY) – 50.9 (neutral)

Russell 2000 (IWM) – 59.5 (neutral)

Dow (DIA) – 52.0 (neutral)

Nasdaq 100 (QQQQ) - 34.6 (neutral)

Filed Under Crowder's Daily Market Commentary ·

Gap higher sucks in buyers and immediately sells-off

January 25, 2008

The gap higher today (on the heels of the Microsoft earnings report) was quickly sold-off, mostly due to the reasons I mentioned in the psiot yesterday. The gap higher pushed the market into a short-term overbought state as well as into strong overhead resistance. I would not be surprised to see the market test the recent lows over the coming days before attempting to move higher once again. One thing is for certain a sustained push lower will be detrimental to the market over the intermediate-term.

As expected, our short-term overbought levels wore off today with the decline. It looks as though a test of the recent lows will put us back in an oversold state and again hoping that a signal is triggered in the ETF Extremes. I will be introducing a few new strategies over the coming weeks so stay tuned.

Have a wonderful and safe weekend!

Overbought/Oversold for January 25, 2008

S&P (SPY) – 36.3 (neutral)

Russell 2000 (IWM) – 42.1 (neutral)

Dow (DIA) – 41.7 (neutral)

Nasdaq 100 (QQQQ) - 37.4 (neutral)

Filed Under Crowder's Daily Market Commentary ·

Gap up Friday could push indices into strong overhead resistance – nearing short-term overbought

January 24, 2008

QQQQ gapped slightly higher at the open continued to rally throughout the first half hour of the trading day. This left our signal behind; however, surprisingly we are nearing a short-term overbought state which, in a bear market, is often a good indication of a temporary reprieve to the downside. The question is are we indeed in a bear market. Many of the technicals I follow certainly indicate that we have moved to that sentiment.

According to the futures the market should open Friday with a gap higher. If the futures hold and indeed we move higher this could add another feather into the bears hat, again, over the short-term. THe gap higher should push the indices back into whats should act as an area of strong overhead resistance.

An interesting read

Overbought/Oversold for January 24, 2008

S&P (SPY) – 46.0 (neutral)

Russell 2000 (IWM) – 47.8 (neutral)

Dow (DIA) – 49.6 (neutral)

Nasdaq 100 (QQQQ) - 44.6 (neutral)

Filed Under Crowder's Daily Market Commentary ·

QQQQ lowest oversold reading in over a year

January 23, 2008

Keeping it short tonight as I am working on updating the site it (should be finished in the next few weeks). Stay tuned!

That is right the tech heavy Nasdaq 100 (QQQQ) actually remained in the red today while the other major indices moved into black and rallied into the closing bell. Yes, QQQQ did move well off its lows, but it still was unable to push into positive territory. As a result, our ETF Extremes strategy is very near a signal which could come as soon as tomorrow. Yippee!!! Hopefully, things hold up and the signal kicks in and most of all lets hope for a positive trade if indeed one occurs.

Overbought/Oversold for January 23, 2008

S&P (SPY) – 35.4 (neutral)

Russell 2000 (IWM) – 48.3 (neutral)

Dow (DIA) – 44.7 (neutral)

Nasdaq 100 (QQQQ) - 8.9 (very oversold)

Filed Under Crowder's Daily Market Commentary ·

Cash is a position and the ETF Extremes Strategy proves just how valauble a position it is

January 22, 2008

The holiday shortened week began much like last week left moff. By now everyone knows what happened today in the market (emergency rate cut)so I will not bother you with the details.

It was interesting to the see the VIX reach the August highs around 37.5 before moving lower. The 37.5 reading in August marked an intermediate-term low in the S&P, so it will be interesting to see if the same occurs this time around.

The market is extremely oversold right now so I would expect to see a bounce over the next few sessions, but as we have seen lately and what is indicative of a bear market, oversold rallies don’t come as quickly.

We did make our first RUT Iron Condor trade today for a credit of $.75. I will post the details tomorrow. We placed the trade for the SPX Iron Condor as well. Again, I will post the results in tomorrow’s post. RUT could end up being a better underlying for our Iron Condor strategy, but I would like to follow it for a few months in the newsletter before making it official.

I could go on for hours about today’s market and the potential future, but I will save that for the next issue of my newsletter.One thing I can say is that our ETF Extremes strategy has been in cash now since late July. Yes, late July. Since that time I have witnessed 2/3’s of my subscribers leave due to a lack of signals and move into strategies that are constantly exposed to the market. Well, where has that left them? While the ETF Extremes strategy has made over 100% since its inception roughly two years ago the benchmark S&P is only up about 4.5%. Moreover, since our last signal on 7/26 the S&P has lost -12.1%. I think this and the fact that we have lost so many fly by night subscribers shows how committed we are to this strategy. It also proves that we are running a strategy not a business. Hopefully, our performance speaks for itself, especially over the long haul. Yes, I have been just as frustrated by the lack of signals, but I have also stuck by the strategy’s guidelines not forcing a trade which has certainly paid off during the recent decline. We are nearing a signal once again (has happened several times since our last official trade) so hopefully we will see a profitable trade in the near future. I think 113.4% with only 15 trades over two years speaks for itself. As I always say the less you trade the more profitable you will be. Most in the options world can’t understand this concept. They see wonderful gains for 6 months, even a year and then it all comes crashing down. Being exposed to the market at all times, especially in options, means being exposed to the good times and the bad. Cash is a position that is often overlooked.

Overbought/Oversold for January 22, 2008

S&P (SPY) – 10.4 (very oversold)

Russell 2000 (IWM) – 14.3 (very oversold)

Dow (DIA) – 11.9 (very oversold)

Nasdaq 100 (QQQQ) - 13.9 (very oversold)

Filed Under Crowder's Daily Market Commentary ·

January 2008 Expiration Report Now Available on Insider’s Page

January 21, 2008

Crowder Investment Research, LLC

The January 21, 2008 Expiration Report, Issue #28 is now available on the Insider’s page of the website.

Please do not hesitate to email us with any suggestions, questions, comments, etc. We welcome and appreciate all of your feedback.

Click here to access the Crowder Investment Research website.

Sincerely,

Andrew Crowder

Crowder Investment Research, LLC

Filed Under Crowder's Daily Market Commentary ·

What a horrible way to start 2008!

January 17, 2008

What a great wat to start out 2008 with one of the worst months in many, many years. Today marked the worst pre-options expiration performance in over 15 years. Losses during a one month time frame are reaching historical proportions. One thing is for certain, I am very discouraged by the outcome today and what looks like a max loss in the SPX Iron Condor for the January expiration.

Unless Big Ben comes in with a rate cut tomorrow moring we will experience our first max loss in the SPX Iron Condor strategy since we went to using an extra-wide range. This is why I talk about the importance of position sizing in the newsletter.

SPX was 13 points above the short out strike at the close yesterday. It actually opened the day higher and then simutaneouly the Philly Fed and Bernanke came out at 10 EST and absolutely crushed the market in a matter of minutes.

The whole thing has me rethinking the validity of using Iron Condors on a month to month basis. Inevitably months like this will come around and absolutely crush the market. When I added the position in late Decemeber SPX was trading around 1495. 155 points (or about there) or -10.4% later the market is trading around 1340 losing close to 40 points the day before our SPX options expire. Again, this is why position sizing particularly when using any type of Iron Condor strategy is important because losses will inevitably occur. I will discuss the trade in detail in the upcoming Expiration report out this weekend.

The 200-day moving-average has turned lower which essentially means that we are in a bear market. How low will we go nobody knows, but things are certainly looking bleak at the moment.

Over the short-term the major indices have once again moved into “very oversold” territory. Typically this means a sohrt-term reprieve is around the corner. We must remember that when in a bear market oversold conditions can continue to move further into oversold conditions and not see the typically bounce that would normally occur during a bull market.

Overbought/Oversold for January 17, 2008

S&P (SPY) – 14.1 (very oversold)

Russell 2000 (IWM) – 18.2 (very oversold)

Dow (DIA) – 16.6 (very oversold)

Nasdaq 100 (QQQQ) - 20.1 (oversold)

Filed Under Crowder's Daily Market Commentary ·