July 28, 2017

Sector ETF Extremes – Strategy’s First Trade Today

We had our first trade in the Sector ETF Extremes trade today. The trade is still open so I will not report anything until the position is closed (hopefully for a profit) as it would not be fair to those who pay to subscribe to my service and receive real-time alerts among many other things.

IWM looks even more delightful at these levels. As we can all plainly see by today’s action, even short-term overbought levels do not necessarily mean further upside is out of the question. I have remained on the sideline because my short-term overbought/oversold readings (proprietary) have told me to sit patiently for a signal. Will we see one tomorrow? Possibly, but as you all know by now I never force a trade. Again, opportunities are made up easier than losses and with a return that exceeds 150% since the ETF Extremes options strategy was initiated over two years ago why would I want to rush into anything.

Utilities (XLU) has once again caught my etye as it has moved back into a short-term oversold state. I would like to see the sector push further into a short-term oversold extreme before taking a position so I will have to see what the market presents me over the next few days.

As always, I will patiently wait on the sidelines until a high-probability set-up that meets my strict guidelines crosses my path. It has been a great week so far for my options strategies and also a very good year. Hopefully we can continue the trend as the year progresses. Stay tuned for the results of today’s Sector ETF Extremes trade. Until then have a wonderful night!


Overbought/Oversold levels for July 23, 2008

ETF Extremes Options Strategy

* S&P 500 (SPY) – 73.3 (overbought)
* Dow Jones (DIA) – 75.0 (overbought)
* Russell 2000 (IWM) – 83.7 (very overbought)
* NASDAQ 100 (QQQQ) – 59.1 (neutral)

Sector ETF Extremes Options Strategy

* Biotech (IBB) – 82.7 (very overbought)
* Consumer Discretionary (XLY) – 74.2 (neutral)
* Health Care (XLV) – 64.2 (neutral)
* Financial (XLF) – 78.5 (overbought)
* Energy (XLE) – 26.3 (oversold)
* Industrial (XLI) – 77.7 (overbought)
* Materials (XLB) – 43.6 (neutral)
* Real Estate (IYR) – 79.9 (overbought)
* Retail (RTH) – 62.5 (neutral)
* Utilities (XLU) – 23.8 (oversold)

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