August 17, 2017

Archives for July 2008

Weekly Market Review/Preview

The short-term reprieve that I mentioned last week came to fruition this week as the financial sector, oil prices and better than expected earnings reports help to push the market higher. For the week the Dow, S&P, NASDAQ and Russell 2000 finished the week higher at 3.6%, 1.7%, 2.0% and 2.7%, respectively The financial sector led the way lower on Monday after news was released over the weekend of a collapse in Indymac. It was the second-largest banking failure in U.S. history, and its collapse can be viewed as a cautionary tale: Not just of how America recklessly embraced subprime mortgages, but of how these questionable home loans have ripped through the wider economy, shredding confidence in the markets and inciting a global … [Read more...]

New Overbought/Oversold Comments Section – New Sunday Review/Preview – Important Site Updates

New readers please visit stop by my new comments section. Let's build a forum that focuses on the various short-term overbought/oversold measures (as well as other topics) within the current market. As a community everyone can stay informed of the various ETFs, stocks, etc. that have moved into an extreme state. Starting today I have decided to only post the short-term overbought/oversold readings for my options strategies on Friday's. Please note that I follow several that I do not mention on this site for proprietary reasons, but do know that I use the following as my initial screen for all potential trades. I will posting my new weekend review/preview starting this Sunday. Stay tuned! Have a great … [Read more...]

Could Options Expiration Bring Two Trades?

As I write this all of the major benchmarks are down after hours. If this holds into the open tomorrow we should see the overbought levels in the major indexes move back to a neutral state. What does this do for us? Well, it further sets up the potential for a trade in the Sector ETF Extremes strategy as well as a possible Gap Fade trade. I have to admit I was tempted to place a QQQQ trade, but was cautious due to the tech-heavy earnings reports that were due out. It would have worked brilliantly (that is if the market opens lower tomorrow), but I just didn't think the risk/reward was good enough to risk any capital. I was hoping to see a gap up tomorrow and then fade the QQQQ at the open, but unfortunately in trading things do not often … [Read more...]

Utilities (XLU) Very Oversold

It was a great day for the bulls, but how long will it last? Are we witnessing the intermediate-term bounce or is this just another short-term bounce off of oversold levels. My gut tells me that before the downtrend is over we could see lower levels ahead, but I just want to be prepared for the worst. The options strategies I follow remain on the sidelines during the recent volatility. I continue to patiently wait for signals to trigger and then act accordingly. After the recent bounce in XLY and and XLF (both were in short-term "very oversold" territory) my focus has now shifted to Retail (RTH) and Utilities (XLU) sectors. The latter is very close to a signal if all goes well over the next day or so as the shorter-term measures I follow … [Read more...]

And then there was…..

How many options strategies have blown up recently. You know the strategies that are exposed to the market on a daily basis and that incorporate absolutely zero capital preservation (money management) techniques. Most of us have used options strategies, including myself, that do well for months on end only to see the market move sharply during an options expiration cycle. Take for example the Iron Condor. Yes , most of us have used this strategy to much success only to go through a period of sharp directional price action that moves the underlying of choice outside of the chosen range and into negative territory. Just look at the various services that offer Iron Condors as part of their service and you will quickly see why these … [Read more...]

Slew of Reports and Fedspeak

Not an awful lot to say today! The week of options expiration began with more volatile trading. With the slew of upcoming economic and earnings reports coupled with fedspeak I do not expect the wild price action to cease over the short-term. I would like to see another push lower so that the shorter-term oversold indicators officially enter a short-term extreme state. Until then I will be patiently waiting on the sidelines. As for the sector ETFs I follow, well, XLY, XLF and RTH are on my radar. Again, my approach (at least for the short-term options strategies I monitor on this site) is to patiently wait for a high-probability set-up which is most often created during short-term extremes in the market. Once I establish a … [Read more...]

More Short-term Oversold Readings

The decline today pushed the major benchmarks (DIA & SPY) back in a short-term oversold state. It also helped to push the consumer discretionary (XLY), financial (XLF), and retail (RTH) further in a short-term oversold state. I still think the NASDAQ 100 (QQQQ) will see the gap close from 3/24. A move down to the $43.00 area could possibly witness an intermediate-term bottom, but that is highly speculative. Certainly a push to this level over the next few days would push the major indexes and sector I follow in a short-term oversold extreme and would most likely trigger a signal. I want to see a capitulation or flush at this juncture, but it seems that everyone else is looking for this type of event as well. I will continue to … [Read more...]

Patience equals success

The Materials sector (XLB) continued to lag today even with with an overall market advance. The "very oversold" status has me focused an a potential upcoming signal in the Sector ETF Extremes strategy. I would like to see the shorter-term overbought/oversold indicators, namely the RSI (2) move a bit lower before taking a position so I will patiently wait to see what the market offers me over the next few days. We could also see a Gap Fade signal tomorrow in the QQQQ. The tech-heavy ETF closed $.14 shy of the high on the day so some positive news could push the futures and QQQQ well above this area. We will have to wait and see what happens. As for the major benchmarks I trade in the ETF Extremes options strategy, well, all of them … [Read more...]

Opportunities are made up easier than losses

The headline says it all. I expected to see the short-term bounce, but did not want to step in due to the increased probability of a capitulation event. The gains would have certainly been nice for the two Extremes strategies but as I always say "opportunties are made up easier than losses". The two gaps from April have been closed for several days and now my focus is on the gap from 3/24 in the QQQQ or the $43.07 level. While the Dow (DIA) and S&P (SPY) have pushed to new lows, the tech-heavy NASDAQ 100 (QQQQ) has yet to do so. Will it see new lows? No one knows for certain, but with the recent decline the probability of QQQQ touching this level and thereby closing the aforementioned gap increases. I would not be surprised to … [Read more...]

Pushing the post back

My intention was to post before the opening bell today, but sometimes technology doesn't cooperate. As a result, I will be posting (as always) after the closing bell today. Until then, happy trading. Andy … [Read more...]