Slew of Reports and Fedspeak

Not an awful lot to say today!

The week of options expiration began with more volatile trading. With the slew of upcoming economic and earnings reports coupled with fedspeak I do not expect the wild price action to cease over the short-term.

I would like to see another push lower so that the shorter-term oversold indicators officially enter a short-term extreme state. Until then I will be patiently waiting on the sidelines.

As for the sector ETFs I follow, well, XLY, XLF and RTH are on my radar.

Again, my approach (at least for the short-term options strategies I monitor on this site) is to patiently wait for a high-probability set-up which is most often created during short-term extremes in the market.

Once I establish a position then I manage the position with strict money management guidelines, for example, stop-losses to keep losers to a minimum.

So there is your vague tip of the week. I promise to bring you more insightful articles in the near future.

Have a great night!

Overbought/Oversold Levels for July 14, 2008

ETF Extremes Options Strategy

* S&P 500 (SPY) - 23.0 (oversold)
* Dow Jones (DIA) - 25.7 (oversold)
* Russell 2000 (IWM) - 35.8 (neutral)
* NASDAQ 100 (QQQQ) - 33.5 (neutral)

Sector ETF Extremes Options Strategy

* Biotech (IBB) - 66.8 (neutral)
* Consumer Discretionary (XLY) - 19.8 (very oversold)
* Health Care (XLV) - 55.6 (neutral)
* Financial (XLF) - 18.2 (very oversold)
* Energy (XLE) - 44.7 (neutral)
* Industrial (XLI) - 37.6 (neutral)
* Materials (XLB) - 41.2 (neutral)
* Real Estate (IYR) - 31.6 (neutral)
* Retail (RTH) - 25.3 (oversold)
* Utilities (XLU) - 33.5 (neutral)

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