August 24, 2017

If history repeats itself the market could do well over the next few months.

What a day for the market. Bernanke certainly did not disappoint the market with the more than anticipated one-half point rate cute to the fed funds rate. History tells us that over the short-term (1-5 days) we should see a decline although as we go further out (three months) the market typically performs quite well.

Volume in advancing versus declining stocks was a tremendous 25-to-1 today. The last time the market experienced such a huge discrepancy was 25 years ago. Furthermore over the last 50 years the market has only witnessed this type of situation 7 other times, in which all instances were higher three months later with an average return that exceeded 9%.

I know many of you are here for the Diagonal LEAPS Stratetgy that I plan to start next Monday. I know I mentioned going over the basics tonight, but due to time constraints the first installment (and the second) will have to wait until tomorrow.

Overbought/Oversold for September 18, 2007

S&P (SPY) – 79.6 (overbought)

Russell 2000 (IWM) – 72.3 (overbought)

Dow (DIA) – 81.9 (very overbought)

Nasdaq 100 (QQQQ) – 73.5 (overbought)

Oil Services (OIH) – 76.3 (overbought)

Newly added ETF’s (will follow in the Insiders’ page (subscriber’s only) starting 9/24)

Core Sector List

Financials (XLF) – 77.6 (overbought)

Energy (XLE) – 87.6 (very overbought)

Cons. Cyclicals (XLY) – 73.9 (overbought)

Technology (XLK) – 70.9 (overbought)

Health Care (XLV) – 77.3 (overbought)

Materials (XLB) – 85.6 (very overbought)

Industrials (XLI) – 75.9 (overbought)

Cons. Staples (XLP) – 79.3 (overbought)

Telecom (TTH) – 68.8 (neutral)

Utilities (XLU) – 89.2 (very overbought)

Gold (GLD) – 83.5 (very overbought)

I will be adding the overbought/oversold levels for leveraged and international ETF’s tomorrow. Stay tuned! My plain is to follow a total of at least 25 major ETF’s. Again, in the near future this list will only be available to subscribers to the newsletter ot strategies on the Insiders’ page.  

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Andrew Crowder, Chief Investment Strategist, www.crowderinvestments.com