July 21, 2017

Short-Term High-Probability, Mean-Reversion Indicator. A Few Oversold ETFs, But No Extremes.

More uncertainty entered the market today. North and South Korea conflict, more allegations of insider trading and continued concerns plagued the market today and one has to wonder if this market can gain any ground as we move closer and closer to the 2011. Fortunately, I do not concern myself with these types of issues in my trading. The so-called noise does not concern me as much as when the ETFs I follow hit a short-term oversold/overbought extreme.

The High-Probability, Mean-Reversion Indicator was once again successful in pointing out the short-term direction in overbought Retail sector (RTH) as well as the Semiconductors (SMH). After today’s market-wide drubbing, several of the ETFs that I follow have moved into a short-term oversold state, but none of them have yet to display an extreme reading.

The next two trading days are seasonally bullish. Yes, the day before and after Turkey Day are quite bullish, but the two days after that are overwhelmingly bearish.

It is my hope that the market is able to defy the historically seasonal bullishness and move lower tomorrow to push a few of the ETFs I follow into a short-term oversold extreme. If this plays out and I see a few of the ETFs move into an oversold extreme I will be sending out a trade alert to all of my loyal subscribers.

I just wanted to thank all of you for the continued kind words. It seems as though the High-Probability, Mean-Reversion strategy has been a success so far and many of you have been able to take advantage of the indicators that I publish daily. I hope

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Short-Term High-Probability, Mean-Reversion Indicator – as of close 11/22/10

Benchmark ETFs

* S&P 500 (SPY) – 32.3 (neutral)
* Dow Jones (DIA) –28.9 (oversold)
* Russell 2000 (IWM) – 49.1 (neutral)
* NASDAQ 100 (QQQQ) – 40.5 (neutral)

Sector ETFs

* Biotech (IBB) – 46.4 (neutral)
* Consumer Discretionary (XLY) – 43.2 (neutral)
* Health Care (XLV) – 30.2 (neutral)
* Financial (XLF) – 24.1 (oversold)
* Energy (XLE) – 42.6 (neutral)
* Gold Miners (GDX) – 53.9 (neutral)
* Industrial (XLI) – 37.4 (neutral)
* Materials (XLB) – 38.2 (neutral)
* Real Estate (IYR) – 35.8 (neutral)
* Retail (RTH) – 51.8 (neutral)
* Semiconductor (SMH) – 65.9 (neutral)
* United States Oil Fund (USO) – 31.1 (neutral)
* Utilities (XLU) – 25.7 (oversold)

International ETFs

* Brazil (EWZ) – 25.8 (oversold)
* China 25 (FXI) – 22.8 (oversold)
* EAFE (EFA) – 25.3 (oversold)
* South Korea (EWY) – 27.6 (oversold)

Commodity ETFs

* Gold (GLD) – 62.3 (neutral)

Ultra Extremes

* Small Cap Bear 3x (TZA) – 48.9 (neutral)
* Small-Cap Bull 3x (TNA) – 48.3 (neutral)
* UltraLong QQQQ (QLD) – 40.6 (neutral)
* Ultra Long S&P 500 (SSO) – 32.0 (neutral)
* Ultra Short S&P 500 (SDS) – 66.9 (neutral)
* UltraShort 20+ Treasury (TBT) – 35.6 (neutral)

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