August 17, 2017

New High’s and Summer Doldrums

It is almost an understatement to say that the market has been relentless with the Dow (DIA) up 16 out of the last 18 trading sessions. Some of our shorter-term proprietary indicators are nearing extremes which could mean a signal as early as the beginning of next week in our ETF Extremes strategy. Although, it might take until the latter part of next week if seasonal tendencies (bullish end/beginning of month) hold true. 

I do think any short-term gains will be limited until the market experiences a short-term reprieve. It is quite possible to see the 4/20 gap close before we get another extended move upwards. Furthermore, the market is nearing the “Sell in May and Go Away” phase. Yes, the summer doldrums are near and what we typically see is a range-bound market. After the gains we have seen I would not be surprised to see this type of situation occur. If it does it will certainly bode well for our SPX Short IRon Condor Strategy and the ETF Extremes as well.

Overbought/Oversold levels for April 26, 2007

  • SPY –  87.0 (very overbought)
  • DIA – 91.1 (very overbought)
  • IWM – 79.8 (overbought)
  • QQQQ – 92.8 (very overbought)
  • GLD – 33.7 (neutral)
  • OIH – 80.9 (very overbought)

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