August 20, 2017

Great premium and nearing oversold

The S&P tested the recent lows again today and this time the major benchmark was able to hold below the 50-day moving average. This could be key going forward as the 50-day could act as overhead resistance over the short-term.

The major benchmarks that we follow are nearing an oversold state, which should give us a signal in the ETF Extremes portfolio. Although, as my loyal readers know by now the oversold/overbought indicator is just one of the many indicators that make up the ETF Extremes strategy. It has been awhile since our last trade and with a 92% win ratio we look forward to any opportunity that the strategy brings.

As for our SPX Short Iron Condor, we were able to bring in very good premium today while increasing our range significantly. We now have a 160 point range for the underlying SPX to vacillate in over the next four weeks. The underlying SPX has to move over 5.3% up/down over the next four weeks before we are in jeopardy of taking a loss. We certainly like the odds on this trade and if the underlying SPX finishes within our chosen range the strategy stands to make 13.5% over the next four weeks (options expiration).

Overbought/Oversold levels for June 25, 2007

  • SPY –  33.1 (neutral)
  • DIA – 33.1 (neutral)
  • IWM – 36.8 (neutral)
  • QQQQ – 40.2 (neutral)
  • GLD – 38.1 (neutral)
  • OIH – 50.2 – (neutral)  

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