October 25, 2014

Short-Term High-Probability, Mean-Reversion Indicator – Silver (SLV) Hits Another Short-Term Extreme

The last time Silver hit a short-term “very overbought” extreme, I called for a short-term reprieve in SLV and the High Probability, Mean-Reversion strategy made 19.8 % on the trade (you can check out the trade at my third-party monitoring service here). If the Silver ETF opens up tomorrow I will be making the same call so paid subscribers stay tuned for the potential for a real-time trade alert.

As for the rest of the market, well, it seems as though everyone is anxiously waiting for Bernanke & friends to release some type of catalyst over the next two days. I expect to see the market move into the summer doldrums for various reasons immediately following (if not before) Bernanke’s first press conference on Wednesday.

Gold (GLD), semiconductors (SMH) and the tech-heavy Nasdaq 100 (QQQ) have also pushed into a short-term overbought extreme so I expect to see a move lower over the next few trading days.

I hope the strategy is given the opportunity to make a few more profitable trades this month. So far, the options strategy is up 14.2% for the month.

And one more thing.

I decided, per all of your requests, to add a few more ETFs. You will notice the dollar (UUP), India (EPI) and a few others.

Enjoy!

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Short-Term High-Probability, Mean-Reversion Indicator – as of close 4/25/11