Options Expiration Blues - SPY in Very Oversold State

What a way to end the week. The two unclosed gaps (4/16 and 4/18) in the NASDAQ 100 (QQQQ) that I have mentioned over the past several weeks are coming back in the picture. Amazingly, even with today’s sharp decline the QQQQ and IWM are still in a neutral state. However, the two major benchmarks, S&P 500 (SPY) and Dow (DIA) have pushed into a very oversold state and certainly a push lower Monday would trigger a signal in the ETF Extremes. We shall see soon enough.

As for the Secotr ETFs I am keeping a close eye on Health Care (XLV). It narrowly escaped a very oversold reading. The RSI (2) is still above 5 which is slightly above where I would like it to be before I feel comfortable sinking any capital into a position.

One thing is for certain, next week should be very interesting.

Have a wonderful weekend and be sure to tell all your friends about our new service. Hey, with a risk free trial what do you have to lose. Sorry, I had to say it.

Anyway, enjoy the weekend!

Andrew

Overbought/Oversold Levels for June 20th, 2008

ETF Extremes Options Strategy

• S&P 500 (SPY) - 18.9 (very oversold)
• Dow Jones (DIA) - 19.7 (very oversold)
• Russell 2000 (IWM) - 38.2 (neutral)
• NASDAQ 100 (QQQQ) - 34.8 (neutral)

Sector ETF Extremes Options Strategy

• Biotech (IBB) - 49.5 (neutral)
• Consumer Discretionary (XLY) - 26.6 (oversold)
• Health Care (XLV) - 20.3 (oversold)
• Financial (XLF) - 28.6 (oversold)
• Energy (XLE) - 38.9 (neutral)
• Industrial (XLI) - 28.5 (oversold)
• Materials (XLB) - 30.9 (neutral)
• Real Estate (IYR) - 35.4 (neutral)
• Retail (RTH) - 33.2 (neutral)
• Utilities (XLU) - 30.2 (neutral)

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