August 17, 2017

Short-Term High-Probability, Mean Reversion Indicator – ETFs Remain in a Neutral State

The market remains in a short-term neutral state and has for quite some time, but as I always say, patience pays. The weeks when "sit on hands" is most appropriate is often the times when I see irrational trading occur. Remember, the less you trade the better. I can't tell you how many times I have seen subscribers leave because of a lack of trading which befuddles me given the fact that a strategy has proven its worth. This time is no different. Oh well. The Utilities sector (XLU) and China (FXI) are the two ETFs that are closest to a short-term overbought extreme, so of course I will be watching them closely. Believe me, I hope we get another bullish move tomorrow that extends the market and puts several of the ETFs I follow in a … [Read more...]

FXI Trade looking up, while SPY and TZA positions still down.

The FXI trade that I placed yesterday is showing great promise after the surprise rate hike by China that was announced early this morning. Now  if the S&P 500 (SPY) could follow suit it would be a wonderful day. The gap closed in AAPL so now I think we could begin to see the downturn that we bears have been anticipating. The $116.72 area is still acting as a strong area of support (hit it again this morning) so that would be the first obstacle. If SPY can manage to push through that area then I suspect that we could see a decent move to the downside. However, if the market is able to pick back up and move above the $118.70 area then I think all bearish bets are off. I have so much to say, but not enough time right now, so stay … [Read more...]