August 19, 2017

Upcoming Holiday Bias and the Iron Condor

 

The market shot back up today and into what I consider an area of strong resistance at the 910 level on the S&P. As seen below the indexes are currently near an overbought level so I expect to see a short-term pullback. Moreover, we are entering a period of holiday seasonality that has historically displayed a bearish bias leading up to the holiday and a strong bullish slant two to five days after the holiday. I think history could repeat itself again this year but nly time will tell. For the moment, I am watching the 910-875 are in the S&P and a breach and hold above/below those levels would lead me to look further into the next short-term move. 

A move back to a firm neutral state should lead to our first official Iron Condor trade (Insiders Only). I will have more details about the specifics of the trade tomorrow, hopefully intraday, but don’t hold me to it. 

Overbought-Oversold levels for May 18, 2009

ETF Extremes Options Trading Strategy

* S&P 500 (SPY) – 60.7 (neutral)
* Dow Jones (DIA) – 64.1  (neutral)
* Russell 2000 (IWM) – 56.5 (neutral)
* NASDAQ 100 (QQQQ) – 60.6 (neutral)

Other ETFs 

* Ultra Long (SSO) – 60.4 (neutral)
* Ultra Short (SDS) – 37.2 (neutral)