August 18, 2017

Archives for February 2011

Short-Term High-Probability, Mean Reversion Indicator

I just wanted to post the numbers for the indicator tonight. One quick note -  USO and GLD have RSI (2) readings that have reached historical extremes. Also, another successful trade today in the High-Probability, Mean-Reversion strategy. The strategy is up 23.7% since it was initiated in November 2010. Check it out here. Remember, patience pays. This is a long-term strategy, not a fly-by night get-rich quick options strategy. IF you have any questions about the strategy please do not hesitate to email me. If you haven’t already, don’t forget to sign-up for my Free 30-day trial. Also, for those of you who live on Facebook. You can access my daily info there as well. Just click on LIKE. Short-Term High-Probability, Mean-Reversion … [Read more...]

Short-Term High-Probability, Mean Reversion Indicator- USO and GLD Hit Overbought Extremes

The holiday-shortened week started with the market in a short-term overbought state. Couple the aforementioned with the seasonally bearish trading day that typically occurs  immediately following options expiration and one can quickly see why a short-term decline seemed likely. However, no one could have ever predicted the madness that occurred in Libya. The violence in Libya led to a 9% increase in oil prices and was the major catalyst to the 1.4% decline in the Dow (DIA). The uncertainty surrounding the middle east pushed USO and GLD into a short-term overbought state. Both have RSI (2) readings above 98. The decline helped to push the current position in the High-Probability, Mean-Reversion Strategy back into a profitable … [Read more...]

Consumer Discretionary and Nasdaq 100 Hit Short-Term Overbought Extreme

The market marched higher again today and pushed quite a few of the ETFs I follow in an overbought state. However, only Consumer Discretionary (XLY) and the Nasdaq 100 (QQQQ) ETFs  hit a short-term overbought extreme, but neither have RSI (2) readings above 95 so I am only watching from the sidelines for now. If they can push to extreme levels (95+) then there could be a potential for a trade. Until then I will patiently wait on the sidelines. I still have a position in my High-Probability, Men-Reversion strategy and I am quite comfortable with it at the moment as most of the ETFs that I follow have pushed into an overbought state. This often signals that a short-term (1-3 days) reprieve is right around the corner. Furthermore, … [Read more...]

USO Hits an Oversold Extreme

I just wanted to post the High-Probability, Mean-Reversion indicator without much fanfare tonight. The slight decline today pushed quite a few of the overbought readings back to a neutral state. USO is the one "very oversold" ETF that I am keeping a close eye. The RSI (2) has pushed to below 1 at 0.84. A very extreme level indeed. If the ETF opens up lower tomorrow I will most likely be taking a position so subscribers please keep a close eye on the inbox. Have a wonderful night! If you haven’t already, don’t forget to sign-up for my Free 30-day trial. Also, for those of you who live on Facebook. You can access my daily info there as well. Just click on LIKE Short-Term High-Probability, Mean-Reversion Indicator – as of close … [Read more...]

Market Enters One of the Weakest Parts of the Year in a Short-Term “Very Overbought” State. Short-Term Reprieve Ahead?

Twenty out of the twenty-nine ETFs that I follow in the High-Probability, Mean-Reversion strategy have moved into a short-term "overbought" to "very overbought" state. Typically, when we see this type of short-term reading a1-3 day reprieve is right round the corner. There are several potentially bearish signals in the making right now. For one, all of the major market benchmarks are struggling with strong overhead resistance. Also, as I stated yesterday, we have two unclosed gap from 2/1 and 2/7 that are weighing on the market. Moreover, with the exception of tomorrow (11th trading day), the rest of the month is overwhelmingly bearish on a seasonal basis. On a historical basis, the 12th through the 16th trading days in February … [Read more...]

Short-Term High-Probability, Mean Reversion Indicator- Major Benchmarks Hit Short-Term Extreme

First of all I would like to thank all of you for your patience over the past week. I decided to take a brief hiatus from my daily writing, but that does not mean that my trading ceased. I actually placed a trade in the High-Probability, Mean-Reversion strategy last week and hopefully I will have some positive news to report early next week. Anyway..... All of the major indices have moved into a short-term “very overbought” state. More often than not, this type of reading signals a short-term reprieve in the market. There are still unclosed gaps from 2/1 and more recently 2/7. I would expect both gaps to close as we move towards the bearish portion of February – the second worst performing month for the market. Another short-term … [Read more...]

Patience Pays

The ETFs  used in my High-Probability, Mean-Reversion indicator are mostly in a neutral state with XLE being the only one in an extreme state. The RSI (2) of XLE is still lower than 95, so a trade will not be considered unless the ETF pushes over that short-term level. When short-term readings are neutral, patience is required. Overtrading is the downfall to many a trader and strategy. As I state right on my website: Patience is the key ingredient to the success of my strategies and forcing a trade is, in most cases, detrimental to any strategy. My strategies requires patience coupled with a disciplined approach. Waiting for the appropriate scenario to recommend trades with a high probability of success is what makes the … [Read more...]

Short-Term High-Probability, Mean-Reversion Indicator – Other Than Energy (XLE), ETFS Firmly Entrenched in Neutral State?

Monday's rally helped the Dow advance to its best January in over a decade. Today's gain helped the Dow close above 12,000 for the first time since mid-June 2008, which was right before the financial crisis moved into its worst drawdown. The Dow has gained a staggering 84% since it hit a 12-year low in early March of 2009. 480 trading days to be exact - one of the fastest rallies on record. Now that the Dow has hit a 30-month high could the rally be coming to an end? February is the second worst performing month (after September) for the S&P since 1950. However, for the High-Probability, Mean-Reversion strategy it truly doesn't matter. The strategy is more concerned with short-term extremes and as you can see in the readings below … [Read more...]