July 28, 2017

Market Hits Short-Term Extreme

As you can see from the overbought/oversold levels below the market has hit a short-term oversold extreme. The Wilder RSI (2) for both the NASDAQ 100 and the S&P 500 have both moved below 5 which means that the probability of a short-term bounce (1-3 days) looks imminent.

What does this mean for the ETF Extremes and Sector ETF Extremes strategy? It means that if the market opens lower on Monday a trade in both strategies looks likely. Of course, there are a few other proprietary factors that I need to consider, but with that being said the probabilities for a short-term bounce among several of the indices I follow are there.

As has been the case since the beginning of the year I will be placing the trade for all the world to see on www.collective2.com. You can go directly to the ETF Extremes strategy page by clicking on the following link: http://etfextremes.collective2.com

If you have any additional questions or comments please do not hesitate to email me or post a comment on the blog.

Kindest and enjoy the rest of your weekend!


Overbought-Oversold levels for January 24, 2010

ETF Extremes Options Trading Strategy

* S&P 500 (SPY) – 20.9 (oversold)
* Dow Jones (DIA) – 19.2 (very oversold)
* Russell 2000 (IWM) – 25.8 (oversold)
* NASDAQ 100 (QQQQ) – 17.4 (very oversold)

Sector ETF Extremes Options Strategy

* Biotech (IBB) – 38.5 (neutral)
* Consumer Discretionary (XLY) – 20.6 (oversold)
* Health Care (XLV) – 35.9 (neutral)
* Financial (XLF) – 19.1 (very oversold)
* Energy (XLE) – 16.5 (very oversold)
* Industrial (XLI) – 21.0 (oversold)
* Materials (XLB) – 17.9 (very oversold)
* Real Estate (IYR) – 22.1 (oversold)
* Retail (RTH) – 21.4 (oversold)
* Utilities (XLU) – 19.6 (very oversold)

Ultra Extremes

* Ultra Long (SSO) – 19.3 (very oversoldl)
* Ultra Short (SDS) – 81.0 (very overbought)