Short-term Extremes are Back. Will the Options Strategies Benefit?

Well, the time has come again. A signal was triggered in Sector ETF Extremes Options Trading Strategy around mid-day. To be fair to my loyal paying subscribers I will discuss the details on the blog only after the trade is closed. Hopefully, I will have some good news to discuss tomorrow.

As for the current short-term state of the market, well, we are finally seeing some short-term extremes enter the market. The NASDAQ 100 (QQQQ) in our ETF Extremes Options Strategy has moved into a short-term oversold state, while several of the ETF options in our Sector ETF Extremes Options Strategy have pushed into both oversold and overbought territory.

I would like to provide some interesting glimpse or tidbit into the current state of the market, but I really have nothing at the moment other than my simple proprietary overbought-oversold indicators screaming short-term extremes in several of the ETFs I follow for the strategies. In most cases, this is the only info I need to trade successfully. I live by the mantra, Keep It Simple Stupid, and so far the strategies I follow have proved the KISS theory effective.  Why do I want to make the  my trading more complicated than it needs to be?   I can’t begin to tell you how many traders I know that have come and gone because they overwhelm themselves with trying to understand numerous technical strategies and trading methods.  Fortunately, I have found a few simple options strategies that have proved effective over the long-term. Don’t believe me, check out the performance located on the home page of the website, particularly the ETF Extremes strategy. I hate to keep repeating this but, the performance speaks for itself!

Overbought-Oversold levels for September 3, 2008

ETF Extremes Options Trading Strategy

* S&P 500 (SPY) – 44.4 (neutral)
* Dow Jones (DIA) – 52.8 (neutral)
* Russell 2000 (IWM) – 60.5 (neutral)
* NASDAQ 100 (QQQQ) – 22.1 (oversold)

Sector ETF Extremes Options Strategy

* Biotech (IBB) – 46.1 (neutral)
* Consumer Discretionary (XLY) – 68.2 (neutral)
* Health Care (XLV) – 44.4 (neutral)
* Financial (XLF) – 75.5 (overbought)
* Energy (XLE) – 26.9 (oversold)
* Industrial (XLI) – 44.6 (neutral)
* Materials (XLB) – 31.0 (neutral)
* Real Estate (IYR) – 71.3 (overbought)
* Retail (RTH) – 72.4 (overbought)
* Utilities (XLU) – 23.4 (oversold)

If you would like to follow my strategies with real-time alerts or have them auto-traded by a participating broker please click the following link! Try our strategies for a 30 day risk-free trial!