Overbought As Important Economic Data Nears

The market surged today and has pushed the market stalwarts that make up the Dow and S&P into an “overbought” to “very overbought” state. Typically this type of reading means that a short-term reprieve is near. My hope is that the payroll report that is due out tomorrow pleases Wall Street and pushes the futures higher at the open. This will most likely cause a gap and would push the Dow into a short-term extreme. The RSI Wilder (2) for the Dow (DIA) is currently 92 which is slightly below a short-term extreme.

I really do not have much to say at this junctue. Tomorrow cuold present some interesting opportunities for our strategies. As always I will let you (subscribers) know if and when a trade is placed.

Have a great night!

May 1, 2008 – Crowder’s Overbought/Oversold Readings

Major Benchmarks

• Dow (DIA) – 80.2 (very overbought)
• S&P (SPY) – 75.2 (overbought)
• Russell 2000 (IWM) – 69.3 (neutral)
• Nasdaq 100 (QQQQ) – 60.7 (neutral)
• Emerging Markets (EEM) – 79.8 (overbought)

Sectors

• Biotech (IBB) – 68.4 (neutral)
• Consumer Discretionary (XLY) – 74.7 (overbought)
• Health Care (XLV) – 65.4 (neutral)
• Financial (XLF) – 75.0 (overbought)
• Energy (XLE) – 31.3 (neutral)
• Industrial (XLI) – 69.1 (neutral)
• Materials (XLB) – 31.4 (neutral)
• Real Estate (IYR) – 59.8 (neutral)
• Retail (RTH) – 68.4 (neutral)
• Utilities (XLU) – 60.5 (neutral)

International

• Brazil (EWZ) – 70.4 (overbought)
• China (FXI) – 80.2 (very overbought)

Others of Interest

• Clean Energy (PBW) – 37.9 (neutral)
• Water (PHO) – 78.1 (overbought)
• Agriculture (DBA) – 26.1 (oversold)
• Commodity Index (DBC) – 21.6 (oversold)
• Oil Services (OIH) – 30.9 (neutral)