Utilities (XLU) Very Oversold
July 16, 2008 · Print This Article
It was a great day for the bulls, but how long will it last? Are we witnessing the intermediate-term bounce or is this just another short-term bounce off of oversold levels. My gut tells me that before the downtrend is over we could see lower levels ahead, but I just want to be prepared for the worst. The options strategies I follow remain on the sidelines during the recent volatility. I continue to patiently wait for signals to trigger and then act accordingly.
After the recent bounce in XLY and and XLF (both were in short-term “very oversold” territory) my focus has now shifted to Retail (RTH) and Utilities (XLU) sectors. The latter is very close to a signal if all goes well over the next day or so as the shorter-term measures I follow have moved into an extreme state. It has been almost a month since we began the Sector ETF Extremes strategy and so far I have been patiently waiting on the sidelines. Hopefully, my patience will pay off.
As for the other strategies I follow we could potentially see a Gap Fade trade tomorrow in the NASDAQ 100 (QQQQ) if we get a decent push at the open. As always I will send out a real-time trade alert to all subscribers if and when a signal occurs.
Overbought/Oversold levels for July 16, 2008
ETF Extremes Options Strategy
* S&P 500 (SPY) - 48.2 (neutral)
* Dow Jones (DIA) - 52.9 (neutral)
* Russell 2000 (IWM) - 61.2 (neutral)
* NASDAQ 100 (QQQQ) - 56.8 (neutral)
Sector ETF Extremes Options Strategy
* Biotech (IBB) - 80.2 (overbought)
* Consumer Discretionary (XLY) - 55.4 (neutral)
* Health Care (XLV) - 69.6 (neutral)
* Financial (XLF) - 53.5 (neutral)
* Energy (XLE) - 20.0 (oversold)
* Industrial (XLI) - 52.6 (neutral)
* Materials (XLB) - 45.2 (neutral)
* Real Estate (IYR) - 58.1 (neutral)
* Retail (RTH) - 22.2 (oversold)
* Utilities (XLU) - 18.7 (very oversold)
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