August 22, 2017

It is all about managing risk.

As I predicted, QQQQ struggled with support around the $29.25 area. The underlying ETF did carve out new lows (down to $28.90) before it began to rally late in the day (check the recent post with my QQQQ Fib chart). The higher beta Nasdaq 100 (QQQQ) and Russell 2000 (IWM) struggled mightily all day while the market stalwarts, the Dow (DIA) and S&P 500 (SPY) were able to move into positive before the end of the trading day.

I wanted to place a trade, but my price target was not met and as a result I did not send out a trade alert to subscribers. The recent volatility (5%-7% swings intraday) has certainly increased the risk of any trade particularly if they border on marginal and my strategies will not accept marginal trades which is why they can experience stagnant periods.

So, as I have for what seems like an eternity I am sitting patiently on the sidelines. It seems to work to my advantage over and over again.

Have a great night and hang in there!


Overbought-Oversold levels for October 23, 2008

ETF Extremes Options Trading Strategy

* S&P 500 (SPY) – 39.4 (neutral)
* Dow Jones (DIA) – 44.6 (neutral)
* Russell 2000 (IWM) – 29.6 (oversold)
* NASDAQ 100 (QQQQ) – 33.6 (neutral)

Sector ETF Extremes Options Strategy

* Biotech (IBB) – 40.1 (neutral)
* Consumer Discretionary (XLY) – 21.3 (oversold)
* Health Care (XLV) – 38.5 (neutral)
* Financial (XLF) – 32.5 (neutral)
* Energy (XLE) – 43.5 (neutral)
* Industrial (XLI) – 31.4 (neutral)
* Materials (XLB) – 30.7 (neutral)
* Real Estate (IYR) – 17.6 (very oversold)
* Retail (RTH) – 24.5 (oversold)
* Utilities (XLU) – 48.7 (neutral)

Ultra Extremes (Insiders Page Only)

* Ultra Long (SSO) – 31.5 (neutral)
* Ultra Short (SDS) – 58.9 (neutral)

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