June 29, 2017

Archives for October 2010

Tech-Heavy Indices Remain in Short-Term Overbought State

QQQQ has been hovering around $52 for over a week now while simultaneously pushing into a short-term overbought state. Something has to give, but my guess is that it will not occur until the elections and the ucoming fed meeting are over. I am still considering a position in QLD for a short-term play. With an RSI (2) reading of over 98 the probability of a short-term decline looks likely. I will be back later today with more info. Also, sorry about the lack of a post yesterday. It was a trying personal day for me, but I promise that my daily high-probability, mean-reversion indicators will be back in full force this afternoon. Thanks again for all of the loyal support. Kindest, Andy … [Read more...]

SMH, QQQQ, and QLD reach extreme overbought state.

The semiconductors (SMH), tech-heavy Nasdaq 100 (QQQQ) and its counterpart the UltraLong QQQQ (QLD) have all reached an extreme state. All three have RSI (2) readings above 95 which typically means that a short-term decline is near. I am a bit concerned about the seasonal picture ahead as the last two days of October are bullish and the upcoming election increases the bullishness that much more. We shall see soon enough what occurs over the next week or so. Another push lower and I will not hesitate to take off the FXI puts for a nice gain. Currently they are higher 46.6%, but they were as high as 68% this morning. Moreover, I need to start moving the SPY puts out of the portfolio. It is going to be a loss, unless we see a 5% drop … [Read more...]

Daily Short-Term, High-Probability, Mean Reversion Indicator

Short-Term, High-Probability, Mean Reversion Indicator - as of close 10/25 I hope that all of you find the following information useful in your trading endeavors. I will be back later with my daily market commentary. After being deeply oversold on a short-term basis, Brazil (EWZ) bounced back today, and is now sitting comfortably in a neutral state. The ETF gained of $.70 or 0.92%. The at-the-money EWZ Dec10 76 puts had a net change today of $0.55 or 16.4%. Even after today's failed rally (considering the highs of the day), there are still a few ETFs that I am watching for a potential trade. The QQQQ is an obvious one that I have added to my short-term watchlist. The tech-heavy index is on the border of being "very overbought" … [Read more...]

Daily Short-Term, High-Probability, Mean Reversion Indicator

Short-Term, High-Probability, Mean Reversion Indicator I hope that all of you find the following information useful in your trading endeavors. I will be back later with my daily market commentary. Benchmark ETFs S&P 500 (SPY) – 64.9 (neutral) Dow Jones (DIA) – 64.2 (neutral) Russell 2000 (IWM) – 58.8 (neutral) NASDAQ 100 (QQQQ) – 75.6 (overbought) Sector ETFs Biotech (IBB) –52.2 (neutral) Consumer Discretionary (XLY) – 70.3  (overbought) Health Care (XLV) – 60.7 (neutral) Financial (XLF) – 50.1 (neutral) Energy (XLE) – 65.7 (neutral) Gold Miners (GDX) – 37.6 (neutral) Industrial (XLI) – 63.9 (neutral) Materials (XLB) – 49.0 (neutral) Real Estate (IYR) – 78.5 (overbought) Retail (RTH) – 65.6 … [Read more...]

What you have been longing for has finally come to fruition.

Short-Term, High-Probability, Mean Reversion Indicator Per my loyal readers request, I have decided to publish my daily high-probability, mean reversion indicator. I use this as the foundation for searching for my trades. If I find that a certain market, sector, etc. is moving towards an extreme I will add it to my watchlist over the short-term (1-5 days) to see how it performs. If it reaches an extreme, which I will indicate to my loyal subscribers in a real-time trade alert or in the weekend report, I will place a trade. Currently, the Gold Miners (GDX) and Brazil (EWZ) have moved into an oversold state, while Real Estate (IYR) is the only overbought ETF. All three are currently on my watchlist, but none of them have reached an … [Read more...]

VXX breaking to all-time lows.

Was it all a facade? Yesterday, the selling was heavy and historical as the NYSE TICK hit astronomical levels. Panic-selling usually leads to a short-term bounce, but a breach above $118.70 would once again nullify the bearish attempts yesterday. We have seen this type of price action  (heavy selling) five days over the past six weeks and all have led to higher prices afterward. However, this time it is different: yesterday's selling was historical. The NYSE TICK hit levels not seen since the 9/11 crash and the Flash Crash in May. Given the aforementioned and the fact that the next five trading days are historically bearish, I am still sticking with the bears, but my sentiment is strained and I will be exiting if we move up through the … [Read more...]

FXI Trade looking up, while SPY and TZA positions still down.

The FXI trade that I placed yesterday is showing great promise after the surprise rate hike by China that was announced early this morning. Now  if the S&P 500 (SPY) could follow suit it would be a wonderful day. The gap closed in AAPL so now I think we could begin to see the downturn that we bears have been anticipating. The $116.72 area is still acting as a strong area of support (hit it again this morning) so that would be the first obstacle. If SPY can manage to push through that area then I suspect that we could see a decent move to the downside. However, if the market is able to pick back up and move above the $118.70 area then I think all bearish bets are off. I have so much to say, but not enough time right now, so stay … [Read more...]

Post Options Expiration Fallout?

After the best advance since 1939, the market has continued its trod higher right into the middle of October and most importantly, options expiration. As expected the advance has once again, pushed the many of the ETFs I trade into a short-term "overbought" state (mentioned in subscribers' weekly report). Historically, the trading session (and the week for that matter) following options expiration is overwhelmingly bearish. The odds increase dramatically when the market is in an overbought state. This means that since the market held up this past week (as it usually does pre-expiration) the probability of a move lower on Monday increases substantially. I currently have an SPY and TZA positions and will be looking at FXE … [Read more...]

Rough Road Ahead?

Could this chart come to fruition? http://www.etf-corner.com/markets/2010/10/spy-fast-snap-backs-to-the-50-.html Could Serge's prediction of a fast and furious decline over the next 5-6 days come true? Couple the aforementioned with the following study from my favorite analyst, Jason Goepfert of www.sentimentrader.com and I think we could indeed be in for a nice decline over the next few weeks. Intel's Earnings One of the seasonal negatives that we've touched on lately is the market's tendency to fall back soon after Intel releases its quarterly earnings, specifically if the market (meaning the Nasdaq 100) was trading near a multi-month or yearly extreme at the time. Intel's earnings beat expectations, and the stock is … [Read more...]

A few links to start the morning.

Here are a few educational and noteworthy options trading links for you. Enjoy! A few links of interest $4.25 million put spread? SPY below $112? Vertical Spreads … [Read more...]