July 28, 2017

Potential Short-Term Overbought State Ahead???

Another rally today and another push closer to a short-term overbought extreme. While I do think the intermediate-term outlook is bullish (at least through the 4th quarter) I do think that we will witness a short-term pullback before we see another decent leg to the upside. I have stated this repeatedly over the past few weeks.

We do have some positive seasonality ahead.  The first three days of November are overwhelmingly bullish which could help to push the market into a short-term overbought state which could lead to another signal in our ETF Extremes strategy and potentially in our Sector ETF Extremes strategy. I do not trade based on seasonal biases alone, but I do like to keep close tabs on the historical seasonal extremes in the market and how they line up with current market conditions.

ETF Extremes

Yes, the overwhelming success of the strategy over the past 30 months has led to a surge in subscribers. As I have stated repeatedly in the past, I limit the number of subscribers to the newsletter so if you wish to get in please do so soon. I will cap the strategy at 100 for various reasons (liquidity, customer service, etc). However, if you happen to get in late, don’t worry, I will put you on the wait list. I say don’t worry because I often get subscribers who do not understand how I trade the ETF Extremes (they want action) so they are unable to sit patiently on the sidelines for a high-probability setup to occur and eventually their impatience gets the best of them and they move on. For those of you who are interested, please remember, this is a long-term approach using ETF options. So far the strategy has exceeded 150% over the past 30 months and that is with monthly subscription costs and commissions included. As you can tell I am proud of the efforts and the overwhelming success of the ETF Extremes strategy. Subscribe today!

Overbought-Oversold levels for October 30, 2008

ETF Extremes Options Trading Strategy

* S&P 500 (SPY) – 60.5 (neutral)
* Dow Jones (DIA) – 60.2 (neutral)
* Russell 2000 (IWM) – 58.0 (neutral)
* NASDAQ 100 (QQQQ) – 63.9 (neutral)

Sector ETF Extremes Options Strategy

* Biotech (IBB) – 62.2 (neutral)
* Consumer Discretionary (XLY) – 63.0 (neutral)
* Health Care (XLV) – 57.4 (neutral)
* Financial (XLF) – 50.8 (neutral)
* Energy (XLE) – 62.9 (neutral)
* Industrial (XLI) – 60.5 (neutral)
* Materials (XLB) – 59.0 (neutral)
* Real Estate (IYR) – 51.3 (neutral)
* Retail (RTH) – 65.0 (neutral)
* Utilities (XLU) – 62.1  (neutral)

Ultra Extremes (Insiders Page Only)

* Ultra Long (SSO) – 56.0 (neutral)
* Ultra Short (SDS) – 37.0 (neutral)

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