August 17, 2017

Intraday Reversal Impressive – Beware Over the Short-Term

The S&P (SPY) gapped down at the open only to reverse itself immediately and rally into the closing bell. Now the S&P (SPY) is in a overbought state and is directly below what has been an area of very strong overhead resistance at $153.50 or 1530 in the SPX.

Watch this area closely. There is the possibility of a false breakout at this juncture. The key for the bulls is that the S&P can hold the aforementioned areas. Over the short-term a move to the upside does not look sustainable, but every dip has been a buying opportunity, so make sure you are quick enough to lock in some profits of the market affords you the short-term opportunity.

The large move today did not have a profound effect on our current SPX Short Iron Condor position. The premium is roughly $.60 less than where we sold it. Obviously we are enthused with the results so far and with the exception of a rough April expiration (a wonderful learning experience) the strategy has lived up to our expectations. Sound money management, proper position-sizing and a well-diversified group of strategies make a world of difference.


Overbought/Oversold levels for May 30, 2007

  • SPY –  73.7 (overbought)
  • DIA – 78.4 (overbought)
  • IWM – 69.8 (neutral)
  • QQQQ – 66.6 (neutral)
  • GLD –  32.0 (neutral)
  • OIH – 64.6 (neutral)

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