July 28, 2017

Major Benchmarks Short-term Oversold

The four major market benchmarks are officially in a short-term oversold state with the market stalwart, S&P 500 (SPY) in an extreme short-term oversold state. The RSI (2) for SPY is currently 3.6. The last time the RSI (2) for SPY hit a level this low was 5/23 and 4/14/ Both instances witnessed a short-term rally in SPY immediately following the extreme reading.

Tomorrow brings the almighty Fed and surely a volatile market after the release at 2:15 EST. My hope is that we get a bit of a washout move which would not surprise me given the recent barrage by the bears.

Three of the sector ETFs I follow (IYR, XLB, XLI) have also moved into a short-term oversold state. Unfortunately for the Sector ETF Extremes strategy the shortest-term oversold readings that I follow are not quite in an extreme state.

The strategies and myself are quietly sitting on our hands waiting for an opportunity to take a position. It has been several weeks since our last trade so I am hoping to see a signal from the recent decline. Cross your fingers!

Have a great night!


Overbought/Oversold Levels for June 24, 2008

ETF Extremes Options Strategy

* S&P 500 (SPY) – 18.9 (very oversold)
* Dow Jones (DIA) – 20.3 (oversold)
* Russell 2000 (IWM) – 22.1 (oversold)
* NASDAQ 100 (QQQQ) – 28.5 (oversold)

Sector ETF Extremes Options Strategy

* Biotech (IBB) – 38.2 (neutral)
* Consumer Discretionary (XLY) – 31.7 (neutral)
* Health Care (XLV) – 42.2 (neutral)
* Financial (XLF) – 31.5 (neutral)
* Energy (XLE) – 52.8 (neutral)
* Industrial (XLI) – 24.8 (oversold)
* Materials (XLB) – 27.2 (oversold)
* Real Estate (IYR) – 28.5 (oversold)
* Retail (RTH) – 30.7 (neutral)
* Utilities (XLU) – 50.8 (neutral)

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