June 23, 2017

Trade in the Making?

The major benchmarks are sitting well within neutral territory, but I expect that to change as the week progresses. Friday will be the BIG DAY as the Nonfarm Payroll Report will be released and the market will certainly respond as it typically does after the release, with a sharp directional move.

I am currently watching 1020 level of the S&P (SPX) and the $41.00 level of the Nasdaq 100 (QQQQ). Both levels are areas of strong support and given that the all of the major indices are near short-term oversold levels I think a push lower by the bears will certainly be challenged by the bulls.

A decline to oversold levels at an area of strong support is often a high probability trade. We will see if/when the times comes this week as we are hoping for our first trade in many, many months.

Overbought-Oversold levels for November 3, 2009

ETF Extremes Options Trading Strategy

* S&P 500 (SPY) – 39.9 (neutral)
* Dow Jones (DIA) – 42.0  (neutral)
* Russell 2000 (IWM) – 37.4 (neutral)
* NASDAQ 100 (QQQQ) – 33.9 (neutral)

Other ETFs

* Ultra Long (SSO) – 38.4 (neutral)
* Ultra Short (SDS) – 58.8 (neutral)