August 17, 2017

Trades Abound?

The market moved further into a short-term oversold state and in some areas an extreme short-term ‘very oversold’ state. We continue to see temporary bullish price action, but the efforts have not been sustained and eventually sell-off towards the latter part of the trading day.

The major market benchmarks (DIA and SPY) once again held the October 10 lows. As I stated last week, a move into a short-term ‘oversold’ to ‘very oversold’ state while successfully testing the October 10 low could lead to a signal in a few of our options strategies.

Simply put, this market is stretched!

I am watching a few of the ETFs in the ETF Extremes and Sector ETF Extremes strategies. Moreover, we will most likely see a trade in our new Ultra Extremes strategy. Subscribers, I will inform you on the Insiders Page if and when a trade occurs. I will also post a trade summary at the end of the day and post an a detailed analysis of the trade. Remember, the strategy will follow an equity-only portfolio as well as an options-only portfolio. It should be interesting to see how this strategy works over the long-term.

Overbought-Oversold levels for October 27, 2008

ETF Extremes Options Trading Strategy

* S&P 500 (SPY) – 25.2 (oversold)
* Dow Jones (DIA) – 29.4 (oversold)
* Russell 2000 (IWM) – 19.6 (very oversold)
* NASDAQ 100 (QQQQ) – 22.8 (oversold)

Sector ETF Extremes Options Strategy

* Biotech (IBB) – 23.6 (oversold)
* Consumer Discretionary (XLY) – 17.5 (very oversold)
* Health Care (XLV) – 26.7 (oversold)
* Financial (XLF) – 22.1 (oversold)
* Energy (XLE) – 30.4 (neutral)
* Industrial (XLI) – 18.7 (very oversold)
* Materials (XLB) – 17.6 (very oversold)
* Real Estate (IYR) – 13.9 (oversold)
* Retail (RTH) – 20.5 (oversold)
* Utilities (XLU) – 33.1 (neutral)

Ultra Extremes (Insiders Page Only)

* Ultra Long (SSO) – 20.8 (oversold)
* Ultra Short (SDS) – 73.2 (overbought)

If you would like to follow my strategies with real-time alerts or have them auto-traded by a participating broker please click the following link! Try my options trading strategies.