April 28, 2017

Archives for March 2008

IBB Exit and April’s Seasonal Picture

Today marked our fourth successful trade in the PaperTrade Extremes strategy (Insiders Only) for a cumulative return of 92.1%. Yes, 92.1 On Thursday, I placed the following trade (posted to the Insiders page as soon as the trade was placed) in the Biotech sector (IBB) due to the extreme overbought state that it had reached. The trade was the fourth in the PaperTrade Extremes strategy (Insiders Only) since its inception roughly one month ago. The short-term overbought/oversold indicators proved successful again today. The decline in IBB Friday (-$1.28) left the Apr08 80 put worth roughly $5.50. I held onto the trade for several reasons, one being the large unclosed gap in QQQQ that I have mentioned throughout the week. QQQQ moved … [Read more...]

Biotech (IBB) trade successful. Will QQQQ continue the short-term move lower?

The market moved lower again today and as a result the major benchmark and sector ETFs that I follow are all in a neutral state. Yesterday, I placed the following trade (posted yesterday) in the Biotech sector (IBB) due to the extreme overbought state that it had reached. The trade was the fourth in the PaperTrade Extremes strategy (Insiders Only) since its inception roughly one month ago. The short-term overbought/oversold indicators proved successful again today. The decline in IBB today (-$1.28) has left the Apr08 80 put worth roughly $5.50. I held onto the trade for several reasons, one being the large unclosed gap in QQQQ that I have mentioned throughout the week. QQQQ moved decisively lower today and is now only slightly … [Read more...]

Biotech (IBB) trade, 3/24 gap in QQQQ, and more ETFs for the Insiders Page

I have decided, by request, to add two more sectors to the Daily Overbought/Oversold Report. Powershares Agriculture (DBA) and the Powershares Commodity tracking fund (DBC). Both have decent liquidity and will certainly be worthy additions to our current list which now totals 21 (5 on the community blog and the other 16 on the Insiders Page).On a similar note, I placed a trade in the PaperTrade Extremes strategy today (Insiders Only). I placed the following trade in the Biotech sector (IBB) after it had moved into an extreme overbought state.IBB moved up at the open which allowed for a decent entry as the RSI (2) moved up to 98. As always I posted the trade as soon as it was placed so Insiders would have the opportunity to view my trade in … [Read more...]

The Internet (IBB) – Short-term stance on QQQQ remains same

The Internet sector(IBB) was one of the few bullish areas in the market today. IBB was already in an overbought state, but now that the RSI (2) has pushed higher (above 95) and is pinned up against what looks to be strong overhead resistance my guess is that I will take a small position tomorrow near the open in the PaperTrade Extremes strategy. Subscribers, as always I will post the trade on the Insiders page of the website (access through membership area) soon after the trade is placed. Of course, tomorrow has to play out like I hope it will, but I will talk about that tomorrow in the premarket report on the Insiders page. My stance on QQQQ remains the same as yesterday. If you wish to find out more please read the March 25th … [Read more...]

Is a short-term reprieve around the corner?

The Nasdaq 100 (QQQQ) moved into an overbought state today, but the RSI (2) is well off an extreme reading with a reading of slightly over 88. A push towards the mid 90’s intra-day will get my attention. However, the unclosed gap (pictured below) has my attention. Typically, when an index moves into an overbought state after a gap higher the underlying, in this case QQQQ, a short-term reprieve follows. Couple the aforementioned situation with short-term seasonal weakness and you can see why a move back to the $43.10 area in QQQQ seems plausible, at least as far as the technicals go.The two sectors that I was watching closely over the last few days (RTH and IYR) moved back slightly today which moved the RSI Wilder (2) back to 56 and 80, … [Read more...]

Short-term overbought with seasonally weak conditions

Subscribers, if you haven’t already, please click the following link to access the March 2008 Expiration Report. Today’s advance pushed many of the sectors we follow (Insiders page) plus most of the major benchmarks into an overbought state. The move came on a gap open (to the upside of course) that ended the day unclosed. Now the focus is on the overbought conditions in the sectors, namely Retail (RTH), Real Estate (IYR) and Consumer Discretionary (XLY). All three have moved into an overbought state and are very close to an extreme state which would trigger a signal in our PaperTrade Extremes portfolio which I follow on the Insiders page. As always, I will inform you (on the Insiders page) if and when the trade comes  to … [Read more...]

March “Expiration Report” now available on the Insiders Page

Subscribers please go to the Insiders page (accesible through the membership area) to read the March Expiration report. In this issue I discuss the PaperTrade Extremes guidelines, the recent success of the Gap Fade strategy, my proposed RUT and SPX Iron Condors for April as well as a few other seasonal bits of interest. … [Read more...]

Real Estate (IYR) and Retail (RTH)

Daily Random Thoughts Okay let me get this out of the way: Go Ducks!!!! “March Madness” has officially begun and best of all, it falls on a nice long weekend. Here is an interesting article that I post every year around this time:  Using Basketball to Understand Options Market Comments What a week! Up 400, down 300, up 250. Volatility often increases during a bottoming process, so are we indeed witnessing a change in the intermediate-term sentiment? Of  course, as we all know there are no certainties when discussing Mr. Market, but I have seen this set-up many times in the past and it often leads to a reprieve or bounce. However, the market remains below the upper-band of the trading range (see chart below) that began carving … [Read more...]

Predictable

Overbought with overhead resistance nearby has led to short-term declines consistently in 2008. Are we nearing that set-up again? I only have time for the overbought/oversold numbers at the moment. As you can see below Energy (XLE), Materials (XLB), and the International Sectors have led the way lower.  However, everything is still in a neutral state so I will be patiently waiting on the sidelines for a move back into a short-term extreme. Hopefully I will be back later tonight with some market thoughts. Overbought/Oversold for March 19, 2008 Major Benchmarks Dow (DIA)- 49.1 (neutral) S&P (SPY) - 45.7 (neutral) Russell 2000 (IWM) - 46.1 (neutral) Nasdaq 100 (QQQQ) - 46.4 (neutral) Emerging Markets (EEM) - 33.8 … [Read more...]

Look towards 2/29 Gap

Over the past few days I have been talking about the probability of a strong move to the upside. Well, we got just that today and then some. This morning in the premarket report on the Insiders page, I stated the following: A strong advance, if it indeed occurs, would still have to breach the upper band of the trading range (1380-1400) to be taken seriously. Furthermore, if a rally actually occurs, I will be looking for the QQQQ to close its gap from 2/29, or a move to the $44 level. This could act as the first area of overhead resistance. As you can see from above I think the markets, or should I say the bulls, still have some work to do if they want to be taken seriously. Was today’s rally just another good entry point for the … [Read more...]