August 24, 2017

Look towards 2/29 Gap

Over the past few days I have been talking about the probability of a strong move to the upside. Well, we got just that today and then some.

This morning in the premarket report on the Insiders page, I stated the following:

A strong advance, if it indeed occurs, would still have to breach the upper band of the trading range (1380-1400) to be taken seriously.

Furthermore, if a rally actually occurs, I will be looking for the QQQQ to close its gap from 2/29, or a move to the $44 level. This could act as the first area of overhead resistance.

As you can see from above I think the markets, or should I say the bulls, still have some work to do if they want to be taken seriously. Was today’s rally just another good entry point for the bears or will it actually be sustainable this time. Again, there is plenty of work to do on the upside and overbought conditions in a bear market are often instant sell signals, historically and recently. A continuation of the rally tomorrow will certainly push several of the major benchmarks and sectors I follow on the community blog and on the Insiders page in an overbought state and could trigger a few signals.

Moreover, if the futures hold up into the opening bell we will most likely have a Gap Fade signal. This will be our fourth signal if it occurs. The strategy has made 23.1% since its inception at the beginning of February. Insiders stay tuned. I will have more on this tomorrow morning in the premarket report.

Overbought/Oversold for March 18, 2008

Major Benchmarks

  • Dow (DIA)- 65.9 (neutral)
  • S&P (SPY) – 57.2 (neutral)
  • Russell 2000 (IWM) – 56.7 (neutral)
  • Nasdaq 100 (QQQQ) – 57.3 (neutral)
  • Emerging Markets (EEM) – 48.6 (neutral)

more overbought/oversold levels on additional sectors found in the Insider’s page (Buy the White Paper and receive Two Months of the Insiders Page Free) – less than $1 a day.

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