Market Trade Bound

Tomorrow should provide a the fuel for a decent move tomorrow given the FOMC. I would guess that the short-term trading range that we have entered over the past few trading days should be breached with ease tomorrow given the technical situation.

Trade today: I placed a trade at 9:58 this morning at $3.25 for the Apr10 42 calls. Unfortunately, the price was not filled as we would have had a nice 15%-20% gain on the day which I certainly would have taken off the table. Oh well, there is always tomorrow I suppose. In trading you just can’t look back. Each day brings new opportunities and challenges that need our full attention so looking back is often wasteful.

So, with that being said, I plan on entering a trade once again if the market happens to open lower or test the $44 area again on the NASDAQ 100 (QQQQ). I only plan on being in the trade for 1-2 days and will take a smaller usual gain if indeed the opportunity arises.

As has been the case since the beginning of the year I will be placing the trade for all the world to see on www.collective2.com. You can go directly to the ETF Extremes strategy page by clicking on the following link: http://etfextremes.collective2.com

Kindest,

Andy

Overbought-Oversold levels for January 26, 2010

ETF Extremes Options Trading Strategy

* S&P 500 (SPY) – 24.2 (oversold)
* Dow Jones (DIA) – 21.6 (very oversold)
* Russell 2000 (IWM) – 22.4 (oversold)
* NASDAQ 100 (QQQQ) – 26.6 (oversold)

Sector ETF Extremes Options Strategy

* Biotech (IBB) – 31.8 (neutral)
* Consumer Discretionary (XLY) – 30.6 (neutral)
* Health Care (XLV) – 31.5 (neutral)
* Financial (XLF) – 19.4 (very oversold)
* Energy (XLE) – 22.3 (oversold)
* Industrial (XLI) – 27.0 (oversold)
* Materials (XLB) – 21.7 (oversold)
* Real Estate (IYR) – 25.9 (oversold)
* Retail (RTH) – 35.1 (neutral)
* Utilities (XLU) – 35.1 (neutral)

Ultra Extremes

* Ultra Long (SSO) – 23.1 (oversoldl)
* Ultra Short (SDS) – 76.0 (overbought)

Market Advances Slightly – Remains in Oversold State

Based on several indicators I follow I decided to hold off on a trade this morning. The bulls had problems pushing the market higher, but were able to at least hold off a bearish push through what seems to be a decent area of support (QQQQ- $44.00 level).

Again, I would prefer to see another push lower or a gap lower at the open before placing another trade in the ETF Extremes strategy. I indeed this occurs tomorrow I would most likely enter into a position. As always stay tuned to the blog and most importantly my new area on Collective2: http://etfextremes.collective2.com/

As for the Sector ETF Extremes strategy, I am still quite  content  sitting on the sidelines until an extreme comes to fruition in one of the underlying ETFs I follow in the strategy.

Furthermore, I am currently looking at some Iron Condor positions due to the 5 week option expiration cycle so stay tuned as I could have some ideas for a trade as soon as tomorrow.

If you have any additional questions or comments please do not hesitate to email me or post a comment on the blog.

Kindest and enjoy the rest of your weekend!

Andy

Overbought-Oversold levels for January 25, 2010

ETF Extremes Options Trading Strategy

* S&P 500 (SPY) – 26.4 (oversold)
* Dow Jones (DIA) – 21.8 (oversold)
* Russell 2000 (IWM) – 27.2 (oversold)
* NASDAQ 100 (QQQQ) – 25.3 (oversold)

Sector ETF Extremes Options Strategy

* Biotech (IBB) – 32.0 (neutral)
* Consumer Discretionary (XLY) – 28.3 (oversold)
* Health Care (XLV) – 35.9 (neutral)
* Financial (XLF) – 24.8 (oversold)
* Energy (XLE) – 25.1 (oversold)
* Industrial (XLI) – 29.4 (oversold)
* Materials (XLB) – 25.9 (oversold)
* Real Estate (IYR) – 29.7 (oversold)
* Retail (RTH) – 23.3 (oversold)
* Utilities (XLU) – 29.2 (oversold)

Ultra Extremes

* Ultra Long (SSO) – 25.1 (oversold)
* Ultra Short (SDS) – 73.6 (overbought)

Market Hits Short-Term Extreme

As you can see from the overbought/oversold levels below the market has hit a short-term oversold extreme. The Wilder RSI (2) for both the NASDAQ 100 and the S&P 500 have both moved below 5 which means that the probability of a short-term bounce (1-3 days) looks imminent.

What does this mean for the ETF Extremes and Sector ETF Extremes strategy? It means that if the market opens lower on Monday a trade in both strategies looks likely. Of course, there are a few other proprietary factors that I need to consider, but with that being said the probabilities for a short-term bounce among several of the indices I follow are there.

As has been the case since the beginning of the year I will be placing the trade for all the world to see on www.collective2.com. You can go directly to the ETF Extremes strategy page by clicking on the following link: http://etfextremes.collective2.com

If you have any additional questions or comments please do not hesitate to email me or post a comment on the blog.

Kindest and enjoy the rest of your weekend!

Andy

Overbought-Oversold levels for January 24, 2010

ETF Extremes Options Trading Strategy

* S&P 500 (SPY) – 20.9 (oversold)
* Dow Jones (DIA) – 19.2 (very oversold)
* Russell 2000 (IWM) – 25.8 (oversold)
* NASDAQ 100 (QQQQ) – 17.4 (very oversold)

Sector ETF Extremes Options Strategy

* Biotech (IBB) – 38.5 (neutral)
* Consumer Discretionary (XLY) – 20.6 (oversold)
* Health Care (XLV) – 35.9 (neutral)
* Financial (XLF) – 19.1 (very oversold)
* Energy (XLE) – 16.5 (very oversold)
* Industrial (XLI) – 21.0 (oversold)
* Materials (XLB) – 17.9 (very oversold)
* Real Estate (IYR) – 22.1 (oversold)
* Retail (RTH) – 21.4 (oversold)
* Utilities (XLU) – 19.6 (very oversold)

Ultra Extremes

* Ultra Long (SSO) – 19.3 (very oversoldl)
* Ultra Short (SDS) – 81.0 (very overbought)

Strategy Reaps Another Gain

The ETF Extremes had another successful trade today as it locked in a profit of 7.1%. This was the second trade this month and the prior trade saw a profit of 6.6%.So far the strategy is up 12.9% since we moved over to www.collective2.com. The win ratio over the last three years is 84% ( 4 losers out of 25 trades).

Again, my strategy is all about patience, waiting for high-probability set-ups. As I always say, “remember, this is a marathon and not a sprint”. It is not about how many trades you place it is the quality of each trade. Quality over quantity – that is why the win ratio has been outstanding since the strategy began 3 years ago. You can check the performance at www.crowderoptions.com/performance/ .

Dow Overbought – ETF Extremes Strategy Up 6.6% for 2010

As I stated earlier this past week, we had our first trade for 2010 in the ETF Extremes Options Strategy. The performance can be found at the following link: http://etfextremes.collective2.com. This is certainly a wonderful way to start out the New Year and continue the “patience pays” mentality of trading this options-based strategy.

Tomorrow brings options expiration and as we all know the bulls typically reign supreme. However, the bullishness is often short-lived as the bears historically pull the market lower the trading day following options expiration.

With the Dow (DIA) in an overbought state and the Biotech sector (IBB) in a ‘very overbought’ state I am keeping the historical bearish tendency in mind for the makings of a potential trade in the Sector ETF Extremes strategy over the next day or so. Stay tuned for more info.

I hope to begin a forum on Collective2 to make my trading fodder easier to follow. I will let all of you know once I initiate the forum.

Anyway, thanks for the positive feedback and I promise to continue to trade the strategy the way it was intended: with patience. One thing is certain – the performance over the past three years speaks for itself.

If you have any questions please do not hesitate to email me.

Kindest,

Andy

Overbought-Oversold levels for January 14, 2010

ETF Extremes Options Trading Strategy

* S&P 500 (SPY) – 69.4 (neutral)
* Dow Jones (DIA) – 76.3 (overbought)
* Russell 2000 (IWM) – 66.9 (neutral)
* NASDAQ 100 (QQQQ) – 58.5 (neutral)

Sector ETF Extremes Options Strategy

* Biotech (IBB) – 82.4 (very overbought)
* Consumer Discretionary (XLY) – 56.8 (neutral)
* Health Care (XLV) – 76.9 (overbought)
* Financial (XLF) – 69.1 (neutral)
* Energy (XLE) – 61.4 (neutral)
* Industrial (XLI) – 75.3 (overbought)
* Materials (XLB) – 45.7 (neutral)
* Real Estate (IYR) – 51.9(neutral)
* Retail (RTH) – 38.1 (neutral)
* Utilities (XLU) – 51.6 (neutral)

Ultra Extremes

* Ultra Long (SSO) – 30.3 (neutral)
* Ultra Short (SDS) – 68.9 (neutral)

First Trade of 2010 in the ETF Extremes

I placed the first trade of 2010 on January 5th on the www.collective2.com website. You can check out the performance so far on the former link.

As  you  can see I had a small profit going into Thursday, but my profit target had not been met. As the week came to end I was down a bit, but roughly $.15 from where my mental stop is located. I always limit my loss to roughly $.30 or approximately 10%. This has worked for the strategy since its inception over three years ago. Check out the performance since 2006 on the performance page.

Today, I closed the trade for a $.24 profit or $600. The percentage gain was 6.6%.

This was the 24th trade in the strategy since 2006. So far the win ratio is an astounding 83% with a max draw down of 17%.

I will be back with more details this evening.

Kindest,

Andrew

2010 – New Strategies, Old Strategies and Collective2

I am hoping that 2010 will be a good year for www.crowderoptions.com. After taking a bit of a hiatus for personal reasons I am back with my flagship strategy, the ETF Extremes as well as a few other strategies that I will follow on this blog as well as autotrade on www.collective2.com. Collective 2 uses quite a few options brokers, including www.optionsxpress.com.

I will also be following my New Iron Condor strategy with the intention of adding it to Collective2 over the next couple of months so stay tuned. In addition, I am literally a few weeks away from finally finishing my new book that will be geared specifically towards trading iron condors.

I will be adding the ETF Extremes as well as a few other strategies to www.collective2.com tonight so check it out when you get a chance. They do a wonderful job of keeping performance records and best of all the strategies that I have selected will only cost money if they are profitable.

Have a great night and here is to a prosperous 2010!!!!

Overbought-Oversold levels for January 4, 2010

ETF Extremes Options Trading Strategy

* S&P 500 (SPY) – 69.2 (neutral)
* Dow Jones (DIA) – 65.6 (neutral)
* Russell 2000 (IWM) – 74.0 (overbought)
* NASDAQ 100 (QQQQ) – 72.1 (overbought)

Sector ETF Extremes Options Strategy

* Biotech (IBB) – 73.9 (overbought)
* Consumer Discretionary (XLY) – 52.9 (neutral)
* Health Care (XLV) – 60.1 (neutral)
* Financial (XLF) – 74.2 (overbought)
* Energy (XLE) – 77.0 (overbought)
* Industrial (XLI) – 60.9 (neutral)
* Materials (XLB) – 73.7 (overbought)
* Real Estate (IYR) – 39.2 (neutral)
* Retail (RTH) – 41.2 (neutral)
* Utilities (XLU) – 36.5 (neutral)

Ultra Extremes

* Ultra Long (SSO) – 68.1 (neutral)
* Ultra Short (SDS) – 33.0 (neutral)