August 22, 2017

Options Strategies Continue to Wait for Signal

The continued sell-off today did absolutely nothing for the major benchmarks or the sector ETFs I follow for the options strategies. I am still waiting patiently on the sidelines until a short-term extreme enters the market and other than the Financial sector (XLF) not much has moved  on my radar.

Of course, this could change quickly tomorrow if the decline furthers itself, but my guess is that we a short-term bounce back up to overhead resistance around the 1285 area on the S&P. My guess is that we will eventually test the July 15th low once again, but that it pure speculation.

One thing is for certain a  move below the 1250 area, which is an area of strong support, should bring the bears back out to play. If we are indeed in a bear market I expect to see  a rough road ahead especially if the economic numbers (inflation) continues to surge. The Fed will have no choice but to raise rates if inflation continues to climb and that is historically never positive for market returns. There is quite a bit of uncertainty out there right now so I don’t envy Helicopter Ben and the enormous task that is in front of him.

Again, I apologize for the late post. Subscribers I will have the expiration report in full tomorrow on the Insider’s page. It has been quite a hectic week.


Overbought-Oversold levels for August 19, 2008

ETF Extremes Options Trading Strategy

* S&P 500 (SPY) – 36.2 (neutral)
* Dow Jones (DIA) – 33.3 (neutral)
* Russell 2000 (IWM) – 38.5 (neutral)
* NASDAQ 100 (QQQQ) – 41.9 (neutral)

Sector ETF Extremes Options Strategy

* Biotech (IBB) – 36.7(neutral)
* Consumer Discretionary (XLY) – 44.3 (neutral)
* Health Care (XLV) – 51.1 (neutral)
* Financial (XLF) – 29.2 (oversold)
* Energy (XLE) – 55.9 (neutral)
* Industrial (XLI) – 37.5 (neutral)
* Materials (XLB) – 38.4 (neutral)
* Real Estate (IYR) – 32.3 (neutral)
* Retail (RTH) – 45.5 (neutral)
* Utilities (XLU) – 53.6 (neutral)

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