July 21, 2017

Archives for November 2008

Early and Out – Another Trade Tomorrow?

As I write this QQQQ is down $.50 from the close. Keep this in mind as you read the following post. Today was one what we call a trend day. The market bled lower all day long to close at the lows of the day. It was unfortunate for our flagship strategy, the ETF Extremes Options Strategy, because I entered into a trade around mid-day only to be stopped out at the very end of the day. Moreover, even though my hunch (and many of the technical indicators I follow) tells me that we are going to see a rally over the short-term (1-3 days) I did not think that the risk-reward warranted holding onto the trade given the market moving news (retail, etc) that is due out tomorrow. As I stated in the closing trade alert,  "as I always preach, … [Read more...]

Potential Trade Tomorrow? Why?

The major market indexes and the sector ETFs that I follow continue to float around near the bottom of the trading range that was established slightly over a month ago. Moreover, we are near oversold in almost all of the ETFs I follow below. Also, the put/call ratio at the end of the day was 0.98. This is the highest reading over the past two months. There have been five other occasions over the past two months when the ratio has been approximately this high or higher.  Four out of 5 times the indexes, namely the S&P 500, bounced higher over the next trading session. The average return was 3.5%. I am still watching $29.25 level as the support for the QQQQ, although I do not think we wil lget there given all of the info I … [Read more...]

A Gap Closed and an Established Line of Support

The market gapped slightly higher today and a signal was triggered. However, due to the quick decline the signal was taken off. The gap closed within the first half hour of the day and I did not want to chase a price that was steadily moving lower as it goes against our Gap Fade trading guidelines. Also, I detest trading a gap that occurs coming out of an oversold/overbought state which is what the QQQQ did today. It is typically not a high-probability endeavor. As for the technical condition of the market, the major indexes remain in a neutral state so there is no real edge on an overbought/oversold basis. The index (QQQQ) is still comforatably within the 0.0% and 23.6% fibonacci retracement levels so, again, no real edge … [Read more...]

Short-term bounce on the way?

The short-term trend that I mentioned just a few days ago looks as if it has played out and is most likely nearing an end, at least for the short-term. Of course, with the much anticipated jobs report tomorrow we could see a nice gap to the downside if the market digests the news as bad. However, given the near short-term oversold levels, the probability of a sustained move would be rather low. Could tomorrow be where the end of the year rally begins? If only I had a crystal ball. Currently, most of my indicators are in a neutral state with a slight leaning towards oversold. Moreover, the major indexes are sitting comfortably between areas of strong overhead resistance. As always, I will be watching the tech-heavy Nasdaq 100 (QQQQ) … [Read more...]

Expected Short-term Decline Occurs. What’s Next?

As I stated yesterday the short-term outlook (1-3 days) for the market leaned heavily towards a decline. The major indexes as well as several of the sectors I follow on the blog and in my Sector ETF Extremes strategy had moved into a short-term overbought state and was pushing up against the 23.6% fibonacci retracement level. The decline came today and the selling was heavy. Volume picked up again and as expected the VIX moved back above 50 (54.56 to be exact). So what about the rest of the week? Well, tomorrow (as stated in my post yesterday) is a seasonally bearish day and we have a highly anticipated economic report due out Friday which is likely to have a major impact on price action within the market. So, with that being … [Read more...]

Post Election Blues or Just Good Timing for the Bears

I have quite a few items to cover today and no, none of them are political. I will save that for the pundits. First, I would like to point out that the Nasdaq 100 (QQQQ) is touching an important fibonacci level (23.6%) while pushing into a short-term overbought state. This often spells trouble for the bulls over and considering where we have come from over the past 8 trading days I would expect to see a short-term decline over the next few days, at least that is what Mr. Probability is telling me. This is also the case for several of the sector ETFs I follow (look at readings below). Moreover, the Ultra Short ETF for the S&P 500 (SDS) has pushed into an oversold state. Again, probability states that any gains will not be … [Read more...]

Waiting for a Decision

Not much to say today. All eyes are on the upcoming election and I expect to see the same tomorrow unless some rumors start to float regarding a winner. However, I expect to see a highly volatile market once the election is over and up until the announcement of the highly anticipated jobs report on Friday. It will be an interesting week indeed. Until then I will be patiently waiting on the sidelines. Have a great night! Overbought-Oversold levels for November 3, 2008 ETF Extremes Options Trading Strategy * S&P 500 (SPY) - 62.5 (neutral) * Dow Jones (DIA) - 62.1 (neutral) * Russell 2000 (IWM) - 66.9 (neutral) * NASDAQ 100 (QQQQ) - 63.2 (neutral) Sector ETF Extremes Options Strategy * Biotech (IBB) - 72.0 … [Read more...]