August 19, 2017

More sectors move into an Extreme State

I just wanted to remind all of you that I will be going over the SPX and RUT Iron Condor positions over the weekend. As I stated in the Expiration Report the March expiration cycle is five weeks. I wait out the first week as I only trade Iron Condors four weeks out. Remember, the Iron Condor strategies are available to all newsletter subscribers.

Back to the market… The Energy sector (XLE) pushed further into an extreme overbought state and the RSI (2) has now made its way up to 96.4. As I stated yesterday, I like to see a reading above 98. An intraday push to the upside will certainly move the RSI (2) above 98 and will most likely trigger a trade. I will inform you (on the Insiders page) intraday if I make a move. I have been thinking of keeping track of the moves in a PaperTrade account for subcribers’ viewing on the Insiders’ page as well. This should give you a better idea how I trade on a daily basis.

Anyway, some other sectors that have moved into an extreme overbought state today or are nearing that condition are Materials (XLB), Brazil (EWZ), and EEM (Emerging Markets). The Biotech sector (IBB) has actually moved into an oversold state with a RSI (2) so I will watching to see if the sector moves further into oversold territory while the RSI (2) moves to 2 or below.

Brazil (EWZ) has moved into a “very overbought” state with an RSI (2) reading of 94.5. I will be watching it closely over the next few days. Just like XLE, I will look to see if EWZ can push further into an overbought state with a RSI (2) above 98. I will talk about it tomorrow on the Insiders page.  

I just wanted to thank all of you for he kind words in regards to the new premarket, intraday and postmarket comments that I am now posting to the Insiders’ page of the website. I have to admit I have enjoyed it and it really keeps me focused on the current price action, particularly how the sectors are reacting in relation to one another. This should lead to further strategies that I will go over a the Insiders’ page evolves. So far I think we are off to a great start.

Thanks again,


Overbought/Oversold for February 20, 2008

Major Benchmarks

  • Dow (DIA) – 56.7 (neutral)   
  • S&P (SPY) – 59.3 (neutral)
  • Russell 2000 (IWM) – 57.2 (neutral)
  • Nasdaq 100 (QQQQ) – 48.8 (neutral) 

more overbought/oversold levels on additional sectors found in the Insider’s page

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