August 17, 2017

High-Probability, Mean-Reversion Indicator Screaming Short-Term Overbought

As the old Wall Street adage goes, "don't sell a dull market". The S&P 500 came into the holiday shortened week in a short-term "very oversold" extreme. So the bounce this past week came as no surprise. It was the magnitude of the bounce that surprised many. The S&P as seen through SPY climbed 3.7% in a little over 3 days. But now, the bears are salivating as the pot odds move back to their least over the short-term. As seen in the chart below, not only SPY, but all of the major market ETFs have pushed into a short-term overbought state. Moreover, several sectors have moved into a "very overbought" state. Couple the aforementioned extremes with strong overhead resistance and you can quickly see why the bears … [Read more...]

Strategy Continues to Outperform the Market – Up 34.6%

I took a hiatus from my daily post yesterday so that I could evaluate the latest trades in my High-Probability, Mean-Reversion Strategy. I closed out my Silver (SLV), Russell 2000 (IWM) and S&p 500 (SPY) positions during the last two trading sessions for an nice overall return. Both the SLV (+19.8%) and IWM (+21.3%) trade were profitable. However, the SPY trade did not experience the same good fortune. The strategy experienced its first loss since it was initiated back in November as SPY lost 20.2%. The High-Probability, Mean-Reversion strategy is now up 34.6% since it was initiated six months ago with a win ratio of 92.3%. So far the strategy is up 14.2% for the month April. Check out the results yourself. The performance … [Read more...]

Short-Term High-Probability, Mean-Reversion Indicator – Gold, Oil and Natural Gas Hit Extremes

The stock market opened the day lower and toiled around negative territory in the early part of the trading session, but bounced hard during mid-day to finish in positive territory. As a result, gold (GLD, gold miners (GDX), oil (USO) and natural gas (UNG) pushed into a short-term extreme. Natural Gas is the one to watch here. Given that the High-Probability, Mean-Reversion Indicator has pushed into a short-term extreme and that the RSI (2) has moved above 99, it is highly plausible that a short-term reprieve is near (1-3 days). Subscribers stay tuned. … [Read more...]

Short-Term, High-Probability, Mean-Reversion Indicator

Here are the current readings for the High-Probability, Mean-Reversion Indicator. Oh yeah, if you haven't noticed the table is slightly different. I would love to know what you guys/girls think. Any feedback would be greatly appreciated. Also if you have any suggestions for ETFs that you would like to see on the list let me know. Just know that the bid-ask spread must be reasonable or i just isn't worth following because an options trade would not make sense when using the strategy. Liquidity is key. … [Read more...]