June 23, 2017

Upside should be limited over the short-term

The last two days have been witness to the largest point gain in the S&P in over four years. As is often the case after large moves upside momentum is limited over the short-term. I would expect to see a pause here and most likely a move back to 1500 before the bulls step back in.

If the market is able to hold up over the next two days I would expect to see some weakness going into next week. The week after September triple witching has seen the Dow lower 13 out of the last 16 years and given the recent surge a short-term move lower is certainly not out of the question. Furthermore, September is notorious for having a weak close.

With that said I think a move back to the 1500 area should bring buyers back in, particularly the ones that missed the boat after the initial launch. This is typically the case when the market surges and I would not expect to see anything different this time around.

Remember what I stated yesterday, “volume in advancing versus declining stocks was a tremendous 25-to-1 today. The last time the market experienced such a huge discrepancy was 25 years ago. Furthermore over the last 50 years the market has only witnessed this type of situation 7 other times, in which all instances were higher three months later with an average return that exceeded 9%.”

Keep this in mind as we move into one of the strongest periods of the year.

I know many of you are here for the Diagonal LEAPS Stratetgy that I plan to start next Monday. I know I mentioned going over the basics tonight, but again due to time constraints the strategy discussion will have to wait until tomorrow.

The week has been hectic with emails and the like. The service (and traffic) is growing exponentially and interest in the new SPY Diagonal LEAPS Strategy has sparked quite a bit of interest. We can’t wait to get started! Thanks for your patience!

Overbought/Oversold for September 19, 2007

S&P (SPY) – 82.2 (very overbought)

Russell 2000 (IWM) – 77.4 (overbought)

Dow (DIA) – 84.5 (very overbought)

Nasdaq 100 (QQQQ) – 75.1 (overbought)

Oil Services (OIH) – 83.1 (very overbought)

Newly added ETF’s (will follow in the Insiders’ page (subscriber’s only) starting 9/24)

Core Sector List

Financials (XLF) – 79.9 (overbought)

Energy (XLE) – 89.5 (very overbought)

Cons. Cyclicals (XLY) – 74.7 (overbought)

Technology (XLK) – 73.9 (overbought)

Health Care (XLV) – 80.2 (very overbought)

Materials (XLB) – 87.9 (very overbought)

Industrials (XLI) – 80.3 (very overbought)

Cons. Staples (XLP) – 79.7 (overbought)

Telecom (TTH) – 76.0 (overbought)

Utilities (XLU) – 92.1 (very overbought)

Gold (GLD) – 80.0 (very overbought)

International

FTSE/XINHUA China 25 (FXI) – 83.5 (very overbought)

Latin America (ILF) – 77.1 (overbought)

MSCI EMU (EZU) – 75.1 (overbought)

Australia (EWA) – 74.8 (overbought)

India (INP) – 83.6 (very overbought)

Commodities

Natural Gas (UNG) – 50.7 (neutral)

Agriculture (DBA) – 80.0 (very overbought)

Base Metal (DBB) – 72.3 (overbought)

Energy (DBE) – 88.2 (very overbought)

Prec Metal (DBP) – 88.5 (very overbought)

Okay, the plan is to follow a total of at least 25 major ETF’s is complete. Again, in the near future this list will only be available to subscribers to the newsletter/strategies on the Insiders’ page.  

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Andrew Crowder, Chief Investment Strategist, www.crowderinvestments.com