August 17, 2017

Short-Term Reprieve Could Be Close

All of the major indices I follow have now moved into a short-term overbought state. Typically, this type of short-term state signals that a reprieve is highly probable sometime during the next 1-3 days.

One thing that should be pointed out is that during the week of options expiration the market tends to sway towards the bulls so we could see the market stay afloat for a few more days. However, the ‘very overbought’ NASDAQ 100 (QQQQ) is near a major level of resistance at $44.75 so I would expect to see a fight to break out between the bulls and bears if indeed the tech-heavy QQQQ pushes to that level. A move to the the $44.75 level would also push the RSI (2) to a short-term extreme state which would also signal that a move to the downside is imminent.

Until tomorrow. Have a great night!!!


Overbought-Oversold levels for November 16, 2009

ETF Extremes Options Trading Strategy

* S&P 500 (SPY) – 76.5 (overbought)
* Dow Jones (DIA) – 79.1  (overbought)
* Russell 2000 (IWM) – 70.0 (overbought)
* NASDAQ 100 (QQQQ) – 82.2 (very overbought)

Other ETFs

* Ultra Long (SSO) – 76.5 (overbought)
* Ultra Short (SDS) – 22.8 (oversold)