August 20, 2017

All Four Major Indices in Overbought Territory – ETF Extremes

All of the major benchmarks that I follow are back in a short-term overbought state. Typically, when this type of extreme occurs a short-term reprieve follows.

All of the major indices are sitting directly below strong overhead resistance. Combine this with the aforementioned overbought conditions and the probability of a fade increases. Furthermore, the two gaps (4/16 & 4/18) from two weeks ago continue to weigh on the recent low volume rally. If I sound a bit bearish at the moment, well, I am, but only over the short-term. Of course, we could see an intermediate-term decline going forward (or the exact opposite) but for the purpose of my options strategies I will stick to the short-term time frame.

Eight out of the seventeen sectors I follow (Insiders page only) have also moved into an overbought state with several reaching a short-term overbought extreme.  I will discuss these as well as my potential trades for the PaperTrade Sector Extremes in the premarket report tomorrow morning (Insiders page).

I also placed a trade in the ETF Extremes strategy (our second trade of the year in the strategy) today. Hopefully, the trade will go as well as the prior trade. At the beginning of the month we made 18.3%  for a cumulative return that now exceeds 130% since the strategy was initiated two years ago. I will let everyone know the details  of the trade once the position is closed.

Have great night!

April 28, 2008 – Crowder’s Overbought/Oversold Readings

Major Benchmarks

  • Dow (DIA) – 77.6 (overbought)
  • S&P (SPY) – 78.1 (overbought)
  • Russell 2000 (IWM) – 73.2 (overbought)
  • Nasdaq 100 (QQQQ) – 70.3 (overbought)
  • Emerging Markets (EEM) – 59.6 (neutral)

more overbought/oversold levels on additional sectors found in the Insider’s page (Buy the White Paper and receive Two Months of the Insiders Page Free) – less than $1 a day.We work hard to bring you our latest views, opinions and research on a daily basis. If you are a loyal reader and find our thoughts useful please show us your support by joining our newsletter service.

Check out our Gap Fade strategy and ETF Extremes strategy! Learn the simplicity of four powerful options strategies in our newsletter including SPX and RUT Iron Condors.

acclaimed E-Book! With your purchase you will receive Two Free Months of our investment newsletter plus unlimited access to our Insider’s page enabling you to follow our strategies as you learn. What do you have to lose? Join today!