August 17, 2017

Short-Term High-Probability, Mean-Reversion Indicator – It’s Finally On!

Yesterday, I mentioned that EFA had moved into a short-term oversold state and that the RSI (2) for the ETF had pushed to slightly above 5. I warned that a potential trade was near.

The catastrophic events in Japan over the weekend led to further declines today and pushed EFA into a short-term extreme with the RSI (2) hitting a low of 1.12 before coming back to close the day at 1.52.

The gap lower today will close once the EFA hits $58.84. This will most likely be my exit point if indeed EFA moves higher over the next few days. As I write this the futures are significantly lower so we will see if we get stopped out first.

Tomorrow should indeed be an interesting one.

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Short-Term High-Probability, Mean-Reversion Indicator – as of close 3/14/11

Benchmark ETFs

* S&P 500 (SPY) – 36.0 (neutral)
* Dow Jones (DIA) 37.1 (neutral)
*Russell 2000 (IWM) – 32.9 (neutral)
* NASDAQ 100 (QQQQ) – 33.8 (neutral)

Sector ETFs

*Biotech (IBB) – 46.4 (neutral)
* Consumer Discretionary (XLY) – 36.9 (neutral)
* Health Care (XLV) – 38.8 (neutral)
* Financial (XLF) – 38.2 (neutral)
* Energy (XLE) – 41.8 (neutral)
* Gold Miners (GDX) – 37.6 (neutral)
* Industrial (XLI) – 41.0 (neutral)
* Materials (XLB) – 37.7 (neutral)
*Real Estate (IYR) – 43.8 (neutral)
* Retail (RTH) – 39.4 (neutral)
* Semiconductor (SMH) – 26.3 (oversold)
* United States Oil Fund (USO) – 45.8 (neutral)
* Utilities (XLU) –41.5 (neutral)

International ETFs

* Brazil (EWZ) – 50.7 (neutral)
* China 25 (FXI) – 55.3 (neutral)
* EAFE (EFA) – 15.5 (very oversold)
* South Korea (EWY) – 49.4 (neutral)

Commodity ETFs

* Gold (GLD) – 55.4 (neutral)

Ultra Extremes

* Small Cap Bear 3x (TZA) – 65.6 (neutral)
* Small-Cap Bull 3x (TNA) – 32.4 (neutral)
*UltraLong QQQQ (QLD) – 32.8  (neutral)
* Ultra Long S&P 500 (SSO) – 35.7 (neutral)
* Ultra Short S&P 500 (SDS) – 62.6 (neutral)
* UltraShort 20+ Treasury (TBT) – 40.3 (neutral)

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Kindest,

Andy