July 28, 2017

Seasonal Weakness Prevails (Subscribers Please Read)

Daily Market Summary

Subscribers check out the intraday article on Gap Fade entries.

The seasonal weakness that I reported in the premarket statement lived up to its historical billing today (at least in a few of the major benchmarks).

All of the major benchmarks gapped significantly higher at the open and immediately sold off from that point forward to close near the lows of the day. The price action didn’t change the short-term outlook very much as the major benchmarks continue to sit in a neutral state.

The notable extreme is in the Energy sector (as seen on the Insiders’ page). The XLE is now officially in a very overbought state with an RSI (2) reading of 94.1. I would prefer to see a number above 98, but anytime an indice reaches an overbought state with an RSI (2) approaching 95 I must begin to pay closer attention. That being said, I will be watching XLE closely over the next few days and will report anything new (possible trade) with the XLE on the Insiders’ page. 

As I stated on the Expiration Report I will be using the Insiders’ page for more discussion including premarket, intraday and postmarket commentary. I will be discussing the strategies we follow in the newsletter (Gap Fade, ETF Extremes, RUT Iron Condor, SPX Iron Condor) plus more trade setups on a variety of sectors that use the Insiders’ page only overbought/oversold measures and RSI (2) readings. 

Overbought/Oversold for February 19, 2008

Major Benchmarks

  • Dow (DIA) – 33.3 (neutral)   
  • S&P (SPY) – 54.9 (neutral)
  • Russell 2000 (IWM) – 55.1 (neutral)
  • Nasdaq 100 (QQQQ) – 43.1 (neutral) 

Sectors

  • Biotech (IBB) – 35.2 (neutral)
  • Consumer Discretionary (XLY) – 46.7 (neutral)

more overbought/oversold levels on additional sectors found on the Insider’s page

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