August 22, 2017

Could We See A Sector ETF Extremes Signal Tomorrow?

Just some short snippets today, but first I would like to point out that the strategies are filling up and quickly. I limit my subscribers to 75 per strategy to keep things manageable on all levels. If you have any questions about the service or the strategies please do not hesitate to email me at andy(at)

Will the bears reign supreme in early August? Possibly. Recent market history shows that over the last ten years the first few weeks of August have only finished positive 3 times.

After the plunge in the market today all of the major benchmark ETFs that I follow are back in a neutral state. However, with the release of the employment report tomorrow that could quickly change.

Biotech (IBB) and now Health Care (XLV) are on my radar with IBB officailly in a short-term extreme overbought state. Depending on the price action in the aforementioned sector we could see a signal early in the trading day tomorrow. I would have placed a trade, but the market-moving capabilities of tomorrow’s employment report I decided it was best to wait patienty on the sidelines to see how the market would interpret the release. Remember, opportunities are made up easier than losses. The strategy is already up 9.8% since it was initiated back in mid-June so I do not want to take any unnecessary risks that could jeopardize the return.

Just one more tidbit of info on the Biotech sector (IBB). The sector has pushed into an extreme overbought state that has not been seen in years and across many time frames.

I will be back tomorrow (maybe later tonight) with a post regarding position-sizing and the strategies.

Have a great night!


Overbought/Oversold levels for July 31, 2008

ETF Extremes Options Strategy

* S&P 500 (SPY) – 53.7 (neutral)
* Dow Jones (DIA) – 48.6 (neutral)
* Russell 2000 (IWM) – 61.2 (neutral)
* NASDAQ 100 (QQQQ) – 57.4 (neutral)

Sector ETF Extremes Options Strategy

* Biotech (IBB) – 94.7 (very overbought)
* Consumer Discretionary (XLY) – 48.8 (neutral)
* Health Care (XLV) – 72.6 (overbought)
* Financial (XLF) – 58.3 (neutral)
* Energy (XLE) – 43.4 (neutral)
* Industrial (XLI) – 49.4 (neutral)
* Materials (XLB) – 60.4 (neutral)
* Real Estate (IYR) – 52.7 (neutral)
* Retail (RTH) – 49.4 (neutral)
* Utilities (XLU) – 42.7 (neutral)

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