August 20, 2017

Several ETFs in a Short-Term Overbought State

Agriculture and India are both in an extreme short-term overbought state. Couple the extreme readings with the fact that the overall market, as seen by the S&P 500 ETF (SPY), is also overbought I would expect to see another short-term reprieve going forward. I've established a few April expiration positions, more specifically a few bear call spreads, to take advantage of the recent overbought readings in the major indexes and are are working well so far. As for my March bear call spread, I am very close to the short strike and will certainly keep everyone (subscribers) aware of any pertinent moves. Stay tuned! If you are a believer in a statistical approach towards investing please do not hesitate to try my options strategies. … [Read more...]

The Time is Now

After completing my daily routine of updating the short-term oversold/overbought list of highly-liquid ETFs for the High-Probability, Mean-Reversion indicator I can't help, but to be excited for the days ahead. Of course, I'm talking short-term, but I think this extends through the November and December expiration cycles as well for those of us who like to sell options. But if you like to play the directional game, which I do once in a while, you can't ask for a better time. Indeed, the God of Probability is smiling right now. Just look at all of the short-term extremes in the market right now. Take your pic. The fact, that all but volatility is in a short-term extremes tells us a mean-reversion is likely. Historically, when we see … [Read more...]

Building Momentum…Another Good Expiration Cycle

Despite the surprising rally over the past week or so, all of our bear call spreads are going to close out the cycle worthless. And as most of us know, in the world of an options seller worthless is a wonderful thing. We only had a few spreads on during the month of October, but both made 17.6% for the cycle. As I've been saying over the past several days, I want to add a spread or two for the November cycle but I wanted to wait until the BS in Washington passed. And now that the buffoonery has passed, I'm happy to say we've been left with a great opportunity. Just look at the overbought/oversold indicator below. Almost everything is in an overbought state on a short-term basis. And even though volatility has been crushed (as seen in … [Read more...]

High-Probability, Mean-Reversion Indicator

I'm adding a new ETF to the mix...Homebuilders (XHB). This one looks ripe for the picking. Highly-Liquid. Implied volatility (IV) has spiked and the ETF is in a "very oversold" state on a short-term basis. Bull put spread? Straight call? Both? Subscribers stay tuned! If you are a believer in a statistical approach towards investing please do not hesitate to try my options strategies. I use simple mean-reversion coupled with probabilities for each and every trade. Give it a try, it’s free for 30 days. If you haven’t, join my Twitter feed or Facebook. Kindest, Andy … [Read more...]

High-Probability, Mean-Reversion Indicator

If you are a believer in a statistical approach towards investing please do not hesitate to try my options strategies. I use simple mean-reversion coupled with probabilities for each and every trade. Give it a try, it’s free for 30 days. If you haven’t, join my Twitter feed or Facebook. Kindest, Andy … [Read more...]

Look Out Below? High-Probability, Mean-Reversion Indicator Extremes

Crowder Options: High-Probability, Mean-Reversion Indicator (9-17-13) As you can quickly see in the table below, all of the major indices are currently in a short-term, and let me emphasize one more time, short-term overbought to very overbought state. Typically, when we see this type of reading the underlying ETF experiences a short term reprieve. The one bullish sign is the fact that we are in a triple witching week. Historically, there has been a positive skew, so the bears will have a few obstacles in there way. However, given the overbought state in almost all of the ETFs we follow, combined with unclosed gaps below and strong overhead resistance the odds are currently with the bears, again for the short-term. One thing is … [Read more...]

Has the Reversal Started?

Important Note to Subscribers: Before I begin I wanted to remind those of you with SPY positions that ex-dividend is on Friday the 15th. It is imperative that if you have any ITM strikes you must take off that position unless you want to be on the hook for the dividend. I will be sending out a trade alert Thursday (possibly tomorrow if SPY moves lower) to remind my subscribers to take the appropriate steps if they indeed have any ITM strikes. The S&P 500 finally took a reprieve today after seven straight days of gains. SPY traded as low as $155.22, but finished the day back up towards the $155.70 level...indeed frustrating for those of us with bear call spreads. But again, it's all about staying the course. And given the current … [Read more...]

Bulls Beware…Major Indices at Historic Extremes

Yes, the market has rallied in the face of, well, almost everything. While I have my doubts about the sustainability of the current rally I'm not going to give you the reasons why...because it's only my opinion and as we all know when using a statistical approach towards investing/trading opinions are essentially useless. The Russell 2000 (IWM), S&P 500 (SPY) and Dow (DIA) have recently pushed to all-time highs which has pushed our High-Probability, Mean Reversion indicators to extreme overbought states. Moreover, if you look at the RSI over various timeframes you will quickly notice that most of the ETFs I follow are pegged right now. Typically, when this time of reading occur we see a decent decline short-term decline going … [Read more...]

A Market Top is Near…At Least Over the Short-Term

As I stated late last week, "a reversal looks imminent." Couple my stated reasons last week, with extreme short to intermediate-term overbought readings in the major market benchmarks and you can quickly see why I think a correction, at least over the short-term, is near. Check out the short-term extremes at the bottom of the page. Tomorrow, could be the day with Bernanke up to bat.   If you haven’t, join my Twitter feed or Facebook. Also, I have officially opened up my strategies to the public.  If you are a believer in a statistical approach towards investing please do not hesitate to try one of my options strategies. I use simple mean-reversion coupled with probabilities for each and every trade. Give it a try, … [Read more...]

High-Probability, Mean-Reversion Indicator

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