August 24, 2017

Another Successful Trade in the ETF Extremes. DIA looks like it could bounce!

First, I would like to mention that our ETF Extremes strategy had another successful trade today. We made 6.2% on the trade. Our win ration since we initiated the strategy at the start  of 2006 is over 91% (11 out of 12 trades) for a cumulative total return of 42.7%. Slow and steady. Patience coupled with proper money management is the key to the strategy’s success.

As for the current state of the market, the major benchmarks, DIA and the S&P are nearing oversold and the higher-beta IWM and QQQQ have pushed back to short-term oversold levels (not published below). Furthermore, it looks as though the high-beta indices bounced sharply off their support levels which has been the norm since the rally began back in mid-July. I would expect to see a retest of the recent highs and would not be surprised to see new highs.

My current focus is on the aforementioned DIA. DIA has moved back near oversold levels and another push lower could signal another potential opportunity. I will be keeping a close eye on this one as the probability of a short-term bounce looks very good.

Also, many of you have written in to me about the last two OIH calls that I have made. Several of you have reported some serious gains and have asked if I could start a strategy that centered around OIH. While I am always tempted to start a new strategy I want to keep my focus on my current strategies and the new Iron Condor Strategy that will begin after March expiration. I promise to keep reporting potential OIH scenarios in the blog and will ultimately leave the decision to my loyal readers. Obviously, many of you are doing just fine on your own and I am just glad I can help.

and we will do our best to save you a spot once we make the portfolio live, which will occur after the March expiration cycle.

Overbought/Oversold levels for February 26, 2007

  • SPY – 44.4 (neutral)
  • DIA – 32.8 (neutral)
  • IWM – 58.4 (neutral)
  • QQQQ – 58.0 (neutral)
  • OIH – 73.9 (overbought)
  • GLD – 77.8 (overbought)

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