August 17, 2017

Archives for November 2010

Short-Term High-Probability, Mean Reversion Indicator. TBT “Very Overbought”.

The market opened higher today, but moved lower as the day wore on. A pop in the Retail Sales report was not enough to keep the bulls happy. As a result, there are quite a few "oversold" to "very oversold" ETFs in the list below, namely QQQQ and RTH. The RSI (2) in both ETFs have moved into an extreme so a move lower tomorrow could trigger a trade. I did place a trade in TBT today as the UltraShort 20+ Year Treasury ETF reached a "very overbought" state which triggered a signal in the portfolio. I will mention the trade in detail in my email that will go out tonight to my loyal subscribers. As for the rest of you, I just wanted to remind you that I am now offering a 30-day FREE trial. Short-Term High-Probability, Mean-Reversion … [Read more...]

Short-Term High-Probability, Mean Reversion Indicator. Energy (XLE) “Very Overbought”. Potential Trade Tomorrow.

Yesterday I mentioned how XLE had moved into a "very overbought" state, but the RSI (2) was slightly lower than I would like before placing a trade. Well, today the ETF moved higher 1.1% or $0.69 and pushed the RSI (2) to a reading of 97.5. Could this be the short-term trigger that leads to a close of the 11/4 gap in the XLE? Certainly, the probability of a short-term decline has increased. Typically when the RSI (2) reading moves into a "very overbought" state, defined by a reading above 95, a short-term decline occurs. So, if XLE opens flat or higher tomorrow I will be placing a trade in the Collective2 account as well as sending out a real-time trade alert to all of my subscribers'. So, to all of my loyal subscribers, stay tuned. As … [Read more...]

Short-Term, High-Probability, Mean Reversion Indicator. Energy (XLE) “Very Overbought”.

If you recall, yesterday I stated that the Biotech ETF (IBB) was in a "very oversold" state according to my High-Probability, Mean-Reversion Indicators. The RSI (2) had pushed to a low of  1.5. I suppose I should have taken my own advice and placed a trade this morning as the ETF pushed down to test the 50-day moving average only to bounce right off and push higher to finish the day up $0.61 or 0.7%. As it stands now, the major market indice, S&P 500 (SPY), is still in an overbought state right alongside the tech-heavy Nasdaq 100 (QQQQ). The Energy ETF (XLE) is now on my radar as it has pushed into a "very overbought" state and the RSI (2) is currently reading 94.4. I would prefer to see a reading above 95 before I take a position so … [Read more...]

Short-Term, High-Probability, Mean Reversion Indicator. Biotech “Very Oversold”.

The Biotech (IBB) sector has succumb to a wave of selling over the past four days. As a result, the ETF has dropped into a RSI (2) reading of 1.8. Typically, when we see this type of reading a short-term bounce is imminent, particularly in a market that sits above the 200-day moving average. IBB is currently well above the 200-day at $85.14, but less than $1 away from its 50-day. If the ETF happens to decline further over the next day or so to test to 50-day I would expect to see a sharp bounce, especially since the ETF is so oversold at the moment. There are also a few overbought to very overbought readings left in a few of the ETFs that I follow. The tech-heavy Nasdaq 100 (QQQQ), Semiconductors (SMH) and Energy (XLE) can't seem to … [Read more...]

History In the Making! Daily Short-Term, High-Probability, Mean Reversion Indicator.

Yes, history in the making. We are witnessing a very rare extreme "very overbought" state in almost every ETF that I follow. If now was not the time to short then I am not sure when would be the best time for a short-term fade of the bullish insanity that we have been witnessing. I was going back over the past several months and during the last 8 weeks we have yet to see a 1.0% pullback in SPY. Since the gap high on 9/1, SPY has managed to climb an astounding 17.2% without pause. Moreover, we have seen four upside gaps go unclosed (9/1, 9/3, 9/13 and 11/4). Of course, I have been short SPY, TZA and FXI during this bullish onslaught,  so my 74% gain that I had established since I began tracking My Option Portfolio back in May has … [Read more...]

Short-Term, High-Probability Mean Reversion Indicator. The Wait is Over!

Tomorrow brings the Fed's QE3 announcement as well as a post-election results. Will it move the market? The VIX certainly thinks so, as it has priced a 2.5% move. At this juncture, the short-term high-probability, mean-reversion indicators are calling for a decline, but as we all know anything can happen in this environment where the government continues to prop up the market day after day. There really isn't much to say tonight. The indicators state it all. The major market indices, SPY and QQQQ have pushed into a "very overbought" state and some of the leading sectors, namely Energy (XLE) has done the same. I will be back tomorrow with an announcement about my service and how I plan on carrying forward. Stay tuned for all of the … [Read more...]

The Next Two Days Will Be Pivotal. Short-Term, High-Probability, Mean Reversion Indicator – 11/1/10

As I am sure all of you know by now tomorrow is pivotal for the market. The elections and QE2 will be announced (QE2 might be Wednesday) and of course everyone has their own opinion as to why the market should go up or down after the smoke has cleared. I think we are due for a correction, as indicated by my short positions in SPY and FXI. I also have a long position in TZA. Unfortunately, I do not have a crystal ball. I will try and get back tonight with another post. Stay tuned! Short-Term, High-Probability, Mean Reversion Indicator – as of close 11/01/10 Benchmark ETFs S&P 500 (SPY) – 66.3 (neutral) Dow Jones (DIA) – 55.0 (neutral) Russell 2000 (IWM) – 39.0 (neutral) NASDAQ 100 (QQQQ) – 76.5 (overbought) Sector … [Read more...]

Focus on SMH

Even though the tech-heavy QQQQ and its aggressive counterpart QLD remain in an overbought state, I am now solely focused on SMH for a new short position. The Semiconductor ETF (SMH) has moved into a "very overbought" state with a RSI (2) reading of 97.5.  Both QQQQ and QLD moved lower Friday which lowered the RSI (2) of both, but kept the high-i indicator above 75. I like to see an RSI (2) reading above 95 before I begin to take a look at the trade. Subscribers, be on the lookout for a trade alert tomorrow. The S&P futures   again as I write this, so tomorrow could be the day that I finally take my lumps on my SPY trades. I might keep my DEc10 SPY puts, but I think the others have to go. Also,  have to pull the plug on my TZA trade. … [Read more...]