Strategies continue to perform well in the face of a declining market

Only four out of the fourteen ETFs that I follow for the strategies currently reside in a short-term neutral state. That leaves ten ETFs in a short-term oversold to very oversold state with several officially in a short-term extreme.

I am still keeping a close watch on the major benchmarks and a few of the sector ETFs that I follow below, most notably XLI and XLY. Fortunately, the strategies have kept me out of the declining market and have proved to do so time and time again. Of course, no strategy is full-proof, but so far the strategies have proved worthy (with the exception of the Sector ETF Extremes which has yet to have a signal since it began three weeks ago) both the ETF Extremes and Gap Fade have outperformed the market by a substantial margin.

The Gap Fade strategy has made 18.2% since its inception back in early 2008 while the underlying QQQQ has only moved higher a tad over 1%. The ETF Extremes has moved higher roughly 38% on the year and over 150% on a cumulative basis since it was initiated well over two years ago.

I have offered a 30 day risk-free trial for all of my strategies, yet it seems most of my readers are unwilling to give it a try. For some reason they would rather be in LEAP strategies or Iron Condors or some other options strategy that requires being exposed to the market on a daily basis. Believe me I have traded all of these strategies (I traded Iron Condors as a strategy early on in my service only to take several large losses even with position-sizing implemented) and none of them work over the long-haul and most of them blow-up over the long-term. Just go back and check the performance of many of the other services who offer these types of strategies and you will see for yourself. Not only that, but they charge and arm and a leg to do so. I just do not understand the appeal. I guess people feel they need to constantly have action. Unfortunately action does not always equal results.

Overbought/Oversold Levels for July 2, 2008

ETF Extremes Options Strategy

* S&P 500 (SPY) - 17.1 (very oversold)
* Dow Jones (DIA) - 10.6 (very oversold)
* Russell 2000 (IWM) - 11.7 (very oversold)
* NASDAQ 100 (QQQQ) - 26.3 (oversold)

Sector ETF Extremes Options Strategy

* Biotech (IBB) - 65.2 (neutral)
* Consumer Discretionary (XLY) - 12.1 (very oversold)
* Health Care (XLV) - 46.4 (neutral)
* Financial (XLF) - 13.8 (very oversold)
* Energy (XLE) - 39.1 (neutral)
* Industrial (XLI) - 12.5 (oversold)
* Materials (XLB) - 6.4 (very oversold)
* Real Estate (IYR) - 22.6 (oversold)
* Retail (RTH) - 20.7 (oversold)
* Utilities (XLU) - 52.7 (neutral)

If you would like to follow my strategies with real-time alerts or have them autotraded by a participating broker please click the following link: Try our strategies for a 30 day risk-free trial!