July 23, 2014

Focus on SMH

Even though the tech-heavy QQQQ and its aggressive counterpart QLD remain in an overbought state, I am now solely focused on SMH for a new short position. The Semiconductor ETF (SMH) has moved into a “very overbought” state with a RSI (2) reading of 97.5.  Both QQQQ and QLD moved lower Friday which lowered the RSI (2) of both, but kept the high-i indicator above 75. I like to see an RSI (2) reading above 95 before I begin to take a look at the trade.

Subscribers, be on the lookout for a trade alert tomorrow. The S&P futures   again as I write this, so tomorrow could be the day that I finally take my lumps on my SPY trades. I might keep my DEc10 SPY puts, but I think the others have to go. Also,  have to pull the plug on my TZA trade. FXI is up in the air as I have a 48.7% profit on the trade right now, but with the futures higher I would imagine we will the FXI move in sync.

Short-Term, High-Probability, Mean Reversion Indicator – as of close 10/29/10

Benchmark ETFs

  • S&P 500 (SPY) – 65.0 (neutral)
  • Dow Jones (DIA) – 54.7 (neutral)
  • Russell 2000 (IWM) – 51.9 (neutral)
  • NASDAQ 100 (QQQQ) – 75.4 (overbought)

Sector ETFs

  • Biotech (IBB) –64.7 (neutral)
  • Consumer Discretionary (XLY) – 68.1  (overbought)
  • Health Care (XLV) – 48.4 (neutral)
  • Financial (XLF) – 45.3 (neutral)
  • Energy (XLE) – 55.4 (neutral)
  • Gold Miners (GDX) – 65.6 (neutral)
  • Industrial (XLI) – 43.8 (neutral)
  • Materials (XLB) – 59.4 (neutral)
  • Real Estate (IYR) – 33.9 (neutral)
  • Retail (RTH) – 37.5 (neutral)
  • Semiconductor (SMH) – 85.4 (very overbought) / RSI (2) – 97.5
  • United States Oil Fund (USO) – 41.5 (neutral)
  • Utilities (XLU) – 43.5 (neutral)

International ETFs

  • Brazil (EWZ) – 49.0 (neutral)
  • China 25 (FXI) – 34.4 (neutral)
  • EAFE (EFA) – 49.0 (neutral)
  • South Korea (EWY) – 43.3 (neutral)

Commodity ETFs

  • Gold (GLD) – 64.2 (neutral)

Ultra Extremes

  • Small Cap Bear 3x (TZA) – 45.9 (neutral)
  • Small-Cap Bull 3x (TNA) – 50.0 (neutral)
  • UltraLong QQQQ (QLD) – 77.4 (overbought)
  • Ultra Long S&P 500 (SSO) – 61.9 (neutral)
  • Ultra Short S&P 500 (SDS) – 37.0 (neutral)
  • UltraShort 20+ Treasury (TBT) – 53.1 (neutral)

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Kindest,

Andy