Crowder Options

Market ‘Very Oversold’ - Short-Term Bounce Imminent

Andrew Crowder — Mon, 01 Feb 2010 00:08:50 +0000

The market ended a disappointing January with a sharp loss as market participants questioned whether the U.S. economy could sustain its large 4^th quarter growth rate. Furthermore, poor earnings in the technology sector left the market wary which led to sharp declines in the high beta arena.

As a result the market moved into a short-term ‘very oversold’ state which typically means that a short-term bounce is imminent (1-3 days).

I made a trade in the ETF Extremes strategy on Thursday morning and currently the trade is in the red. If the market had not moved into a short-term ‘very oversold’ state so quickly I would have taken the trade off for a loss, but given the ‘very oversold’ state of the QQQQ and the low RSI Wilder (2) I decided to hold onto the position. Only time will tell if the decision was a wise one.

I am also looking at a trade in the Sector ETF Extremes strategy early next week so stay tuned for that as well. Currently XLE and XLB are the ETFs of choice for a trade, but I will know more for certain as we enter the trading day Monday. Until then have a wonderful rest of the weekend!

Kindest,

Andy

Overbought-Oversold levels for January 31, 2010

ETF Extremes Options Trading Strategy

* S&P 500 (SPY) - 19.0 (very oversold)
* Dow Jones (DIA) - 18.6 (very oversold)
* Russell 2000 (IWM) - 21.9 (oversold)
* NASDAQ 100 (QQQQ) - 17.3 (very oversold)

Sector ETF Extremes Options Strategy

* Biotech (IBB) - 31.8 (neutral)
* Consumer Discretionary (XLY) - 30.6 (neutral)
* Health Care (XLV) - 31.5 (neutral)
* Financial (XLF) - 19.4 (very oversold)
* Energy (XLE) - 11.3 (very oversold)
* Industrial (XLI) - 19.0 (very oversold)
* Materials (XLB) - 12.1 (very oversold)
* Real Estate (IYR) - 27.0 (oversold)
* Retail (RTH) - 42.2 (neutral)
* Utilities (XLU) - 21.1 (neutral)

Ultra Extremes

* Ultra Long (SSO) - 18.4 (very oversoldl)
* Ultra Short (SDS) - 81.1 (very overbought)

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Market Trade Bound

Andrew Crowder — Wed, 27 Jan 2010 03:29:24 +0000

Tomorrow should provide a the fuel for a decent move tomorrow given the FOMC. I would guess that the short-term trading range that we have entered over the past few trading days should be breached with ease tomorrow given the technical situation.

Trade today: I placed a trade at 9:58 this morning at $3.25 for the Apr10 42 calls. Unfortunately, the price was not filled as we would have had a nice 15%-20% gain on the day which I certainly would have taken off the table. Oh well, there is always tomorrow I suppose. In trading you just can’t look back. Each day brings new opportunities and challenges that need our full attention so looking back is often wasteful.

So, with that being said, I plan on entering a trade once again if the market happens to open lower or test the $44 area again on the NASDAQ 100 (QQQQ). I only plan on being in the trade for 1-2 days and will take a smaller usual gain if indeed the opportunity arises.

As has been the case since the beginning of the year I will be placing the trade for all the world to see on www.collective2.com. You can go directly to the ETF Extremes strategy page by clicking on the following link: http://etfextremes.collective2.com

Kindest,

Andy

Overbought-Oversold levels for January 26, 2010

ETF Extremes Options Trading Strategy

* S&P 500 (SPY) - 24.2 (oversold)
* Dow Jones (DIA) - 21.6 (very oversold)
* Russell 2000 (IWM) - 22.4 (oversold)
* NASDAQ 100 (QQQQ) - 26.6 (oversold)

Sector ETF Extremes Options Strategy

* Biotech (IBB) - 31.8 (neutral)
* Consumer Discretionary (XLY) - 30.6 (neutral)
* Health Care (XLV) - 31.5 (neutral)
* Financial (XLF) - 19.4 (very oversold)
* Energy (XLE) - 22.3 (oversold)
* Industrial (XLI) - 27.0 (oversold)
* Materials (XLB) - 21.7 (oversold)
* Real Estate (IYR) - 25.9 (oversold)
* Retail (RTH) - 35.1 (neutral)
* Utilities (XLU) - 35.1 (neutral)

Ultra Extremes

* Ultra Long (SSO) - 23.1 (oversoldl)
* Ultra Short (SDS) - 76.0 (overbought)

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Market Advances Slightly - Remains in Oversold State

Andrew Crowder — Mon, 25 Jan 2010 22:09:43 +0000

Based on several indicators I follow I decided to hold off on a trade this morning. The bulls had problems pushing the market higher, but were able to at least hold off a bearish push through what seems to be a decent area of support (QQQQ- $44.00 level).

Again, I would prefer to see another push lower or a gap lower at the open before placing another trade in the ETF Extremes strategy. I indeed this occurs tomorrow I would most likely enter into a position. As always stay tuned to the blog and most importantly my new area on Collective2: http://etfextremes.collective2.com/

As for the Sector ETF Extremes strategy, I am still quite content sitting on the sidelines until an extreme comes to fruition in one of the underlying ETFs I follow in the strategy.

Furthermore, I am currently looking at some Iron Condor positions due to the 5 week option expiration cycle so stay tuned as I could have some ideas for a trade as soon as tomorrow.

If you have any additional questions or comments please do not hesitate to email me or post a comment on the blog.

Kindest and enjoy the rest of your weekend!

Andy

Overbought-Oversold levels for January 25, 2010

ETF Extremes Options Trading Strategy

* S&P 500 (SPY) - 26.4 (oversold)
* Dow Jones (DIA) - 21.8 (oversold)
* Russell 2000 (IWM) - 27.2 (oversold)
* NASDAQ 100 (QQQQ) - 25.3 (oversold)

Sector ETF Extremes Options Strategy

* Biotech (IBB) - 32.0 (neutral)
* Consumer Discretionary (XLY) - 28.3 (oversold)
* Health Care (XLV) - 35.9 (neutral)
* Financial (XLF) - 24.8 (oversold)
* Energy (XLE) - 25.1 (oversold)
* Industrial (XLI) - 29.4 (oversold)
* Materials (XLB) - 25.9 (oversold)
* Real Estate (IYR) - 29.7 (oversold)
* Retail (RTH) - 23.3 (oversold)
* Utilities (XLU) - 29.2 (oversold)

Ultra Extremes

* Ultra Long (SSO) - 25.1 (oversold)
* Ultra Short (SDS) - 73.6 (overbought)

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Market Hits Short-Term Extreme

Andrew Crowder — Sun, 24 Jan 2010 17:07:05 +0000

As you can see from the overbought/oversold levels below the market has hit a short-term oversold extreme. The Wilder RSI (2) for both the NASDAQ 100 and the S&P 500 have both moved below 5 which means that the probability of a short-term bounce (1-3 days) looks imminent.

What does this mean for the ETF Extremes and Sector ETF Extremes strategy? It means that if the market opens lower on Monday a trade in both strategies looks likely. Of course, there are a few other proprietary factors that I need to consider, but with that being said the probabilities for a short-term bounce among several of the indices I follow are there.

If you have any additional questions or comments please do not hesitate to email me or post a comment on the blog.

Kindest and enjoy the rest of your weekend!

Andy

Overbought-Oversold levels for January 24, 2010

ETF Extremes Options Trading Strategy

* S&P 500 (SPY) - 20.9 (oversold)
* Dow Jones (DIA) - 19.2 (very oversold)
* Russell 2000 (IWM) - 25.8 (oversold)
* NASDAQ 100 (QQQQ) - 17.4 (very oversold)

Sector ETF Extremes Options Strategy

* Biotech (IBB) - 38.5 (neutral)
* Consumer Discretionary (XLY) - 20.6 (oversold)
* Health Care (XLV) - 35.9 (neutral)
* Financial (XLF) - 19.1 (very oversold)
* Energy (XLE) - 16.5 (very oversold)
* Industrial (XLI) - 21.0 (oversold)
* Materials (XLB) - 17.9 (very oversold)
* Real Estate (IYR) - 22.1 (oversold)
* Retail (RTH) - 21.4 (oversold)
* Utilities (XLU) - 19.6 (very oversold)

Ultra Extremes

* Ultra Long (SSO) - 19.3 (very oversoldl)
* Ultra Short (SDS) - 81.0 (very overbought)

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Strategy Reaps Another Gain

Andrew Crowder — Wed, 20 Jan 2010 19:12:57 +0000

The ETF Extremes had another successful trade today as it locked in a profit of 7.1%. This was the second trade this month and the prior trade saw a profit of 6.6%.So far the strategy is up 12.9% since we moved over to www.collective2.com. The win ratio over the last three years is 84% ( 4 losers out of 25 trades).

Again, my strategy is all about patience, waiting for high-probability set-ups. As I always say, “remember, this is a marathon and not a sprint”. It is not about how many trades you place it is the quality of each trade. Quality over quantity - that is why the win ratio has been outstanding since the strategy began 3 years ago. You can check the performance at www.crowderoptions.com/performance/ .

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Dow Overbought - ETF Extremes Strategy Up 6.6% for 2010

Andrew Crowder — Fri, 15 Jan 2010 03:10:36 +0000

As I stated earlier this past week, we had our first trade for 2010 in the ETF Extremes Options Strategy. The performance can be found at the following link: http://etfextremes.collective2.com. This is certainly a wonderful way to start out the New Year and continue the “patience pays” mentality of trading this options-based strategy.

Tomorrow brings options expiration and as we all know the bulls typically reign supreme. However, the bullishness is often short-lived as the bears historically pull the market lower the trading day following options expiration.

With the Dow (DIA) in an overbought state and the Biotech sector (IBB) in a ‘very overbought’ state I am keeping the historical bearish tendency in mind for the makings of a potential trade in the Sector ETF Extremes strategy over the next day or so. Stay tuned for more info.

I hope to begin a forum on Collective2 to make my trading fodder easier to follow. I will let all of you know once I initiate the forum.

Anyway, thanks for the positive feedback and I promise to continue to trade the strategy the way it was intended: with patience. One thing is certain - the performance over the past three years speaks for itself.

If you have any questions please do not hesitate to email me.

Kindest,

Andy

Overbought-Oversold levels for January 14, 2010

ETF Extremes Options Trading Strategy

* S&P 500 (SPY) - 69.4 (neutral)
* Dow Jones (DIA) - 76.3 (overbought)
* Russell 2000 (IWM) - 66.9 (neutral)
* NASDAQ 100 (QQQQ) - 58.5 (neutral)

Sector ETF Extremes Options Strategy

* Biotech (IBB) - 82.4 (very overbought)
* Consumer Discretionary (XLY) - 56.8 (neutral)
* Health Care (XLV) - 76.9 (overbought)
* Financial (XLF) - 69.1 (neutral)
* Energy (XLE) - 61.4 (neutral)
* Industrial (XLI) - 75.3 (overbought)
* Materials (XLB) - 45.7 (neutral)
* Real Estate (IYR) - 51.9(neutral)
* Retail (RTH) - 38.1 (neutral)
* Utilities (XLU) - 51.6 (neutral)

Ultra Extremes

* Ultra Long (SSO) - 30.3 (neutral)
* Ultra Short (SDS) - 68.9 (neutral)

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First Trade of 2010 in the ETF Extremes

Andrew Crowder — Tue, 12 Jan 2010 17:58:54 +0000

I placed the first trade of 2010 on January 5th on the www.collective2.com website. You can check out the performance so far on the former link.

As you can see I had a small profit going into Thursday, but my profit target had not been met. As the week came to end I was down a bit, but roughly $.15 from where my mental stop is located. I always limit my loss to roughly $.30 or approximately 10%. This has worked for the strategy since its inception over three years ago. Check out the performance since 2006 on the performance page.

Today, I closed the trade for a $.24 profit or $600. The percentage gain was 6.6%.

This was the 24th trade in the strategy since 2006. So far the win ratio is an astounding 83% with a max draw down of 17%.

I will be back with more details this evening.

Kindest,

Andrew

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2010 - New Strategies, Old Strategies and Collective2

Andrew Crowder — Tue, 05 Jan 2010 01:50:20 +0000

I am hoping that 2010 will be a good year for www.crowderoptions.com. After taking a bit of a hiatus for personal reasons I am back with my flagship strategy, the ETF Extremes as well as a few other strategies that I will follow on this blog as well as autotrade on www.collective2.com. Collective 2 uses quite a few options brokers, including www.optionsxpress.com.

I will also be following my New Iron Condor strategy with the intention of adding it to Collective2 over the next couple of months so stay tuned. In addition, I am literally a few weeks away from finally finishing my new book that will be geared specifically towards trading iron condors.

I will be adding the ETF Extremes as well as a few other strategies to www.collective2.com tonight so check it out when you get a chance. They do a wonderful job of keeping performance records and best of all the strategies that I have selected will only cost money if they are profitable.

Have a great night and here is to a prosperous 2010!!!!

Overbought-Oversold levels for January 4, 2010

ETF Extremes Options Trading Strategy

* S&P 500 (SPY) - 69.2 (neutral)
* Dow Jones (DIA) - 65.6 (neutral)
* Russell 2000 (IWM) - 74.0 (overbought)
* NASDAQ 100 (QQQQ) - 72.1 (overbought)

Sector ETF Extremes Options Strategy

* Biotech (IBB) - 73.9 (overbought)
* Consumer Discretionary (XLY) - 52.9 (neutral)
* Health Care (XLV) - 60.1 (neutral)
* Financial (XLF) - 74.2 (overbought)
* Energy (XLE) - 77.0 (overbought)
* Industrial (XLI) - 60.9 (neutral)
* Materials (XLB) - 73.7 (overbought)
* Real Estate (IYR) - 39.2 (neutral)
* Retail (RTH) - 41.2 (neutral)
* Utilities (XLU) - 36.5 (neutral)

Ultra Extremes

* Ultra Long (SSO) - 68.1 (neutral)
* Ultra Short (SDS) - 33.0 (neutral)

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Short-Term Reprieve Could Be Close

Andrew Crowder — Tue, 17 Nov 2009 00:15:39 +0000

All of the major indices I follow have now moved into a short-term overbought state. Typically, this type of short-term state signals that a reprieve is highly probable sometime during the next 1-3 days.

One thing that should be pointed out is that during the week of options expiration the market tends to sway towards the bulls so we could see the market stay afloat for a few more days. However, the ‘very overbought’ NASDAQ 100 (QQQQ) is near a major level of resistance at $44.75 so I would expect to see a fight to break out between the bulls and bears if indeed the tech-heavy QQQQ pushes to that level. A move to the the $44.75 level would also push the RSI (2) to a short-term extreme state which would also signal that a move to the downside is imminent.

Until tomorrow. Have a great night!!!

Andy

Overbought-Oversold levels for November 16, 2009

ETF Extremes Options Trading Strategy

* S&P 500 (SPY) - 76.5 (overbought)
* Dow Jones (DIA) - 79.1 (overbought)
* Russell 2000 (IWM) - 70.0 (overbought)
* NASDAQ 100 (QQQQ) - 82.2 (very overbought)

Other ETFs

* Ultra Long (SSO) - 76.5 (overbought)
* Ultra Short (SDS) - 22.8 (oversold)

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Trade in the Making?

Andrew Crowder — Tue, 03 Nov 2009 22:39:09 +0000

The major benchmarks are sitting well within neutral territory, but I expect that to change as the week progresses. Friday will be the BIG DAY as the Nonfarm Payroll Report will be released and the market will certainly respond as it typically does after the release, with a sharp directional move.

I am currently watching 1020 level of the S&P (SPX) and the $41.00 level of the Nasdaq 100 (QQQQ). Both levels are areas of strong support and given that the all of the major indices are near short-term oversold levels I think a push lower by the bears will certainly be challenged by the bulls.

A decline to oversold levels at an area of strong support is often a high probability trade. We will see if/when the times comes this week as we are hoping for our first trade in many, many months.

Overbought-Oversold levels for November 3, 2009

ETF Extremes Options Trading Strategy

* S&P 500 (SPY) - 39.9 (neutral)
* Dow Jones (DIA) - 42.0 (neutral)
* Russell 2000 (IWM) - 37.4 (neutral)
* NASDAQ 100 (QQQQ) - 33.9 (neutral)

Other ETFs

* Ultra Long (SSO) - 38.4 (neutral)
* Ultra Short (SDS) - 58.8 (neutral)

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