August 24, 2017

What you have been longing for has finally come to fruition.

Short-Term, High-Probability, Mean Reversion Indicator

Per my loyal readers request, I have decided to publish my daily high-probability, mean reversion indicator. I use this as the foundation for searching for my trades. If I find that a certain market, sector, etc. is moving towards an extreme I will add it to my watchlist over the short-term (1-5 days) to see how it performs. If it reaches an extreme, which I will indicate to my loyal subscribers in a real-time trade alert or in the weekend report, I will place a trade.

Currently, the Gold Miners (GDX) and Brazil (EWZ) have moved into an oversold state, while Real Estate (IYR) is the only overbought ETF. All three are currently on my watchlist, but none of them have reached an extreme state. I would like to see the RSI (2) move below 5 in GDX and EWZ and a RSI (2) reading above 95 in IYR before placing a trade. Again, If we do reach that area I will send out a real-time trade alert to my subscribers.

I hope that all of you find the following information useful in your trading endeavors.

Benchmark ETFs

  • S&P 500 (SPY) – 62.4 (neutral)
  • Dow Jones (DIA) – 68.9 (neutral)
  • Russell 2000 (IWM) – 51.1 (neutral)
  • NASDAQ 100 (QQQQ) – 69.4 (neutral)

Sector ETFs

  • Biotech (IBB) – 48.0 (neutral)
  • Consumer Discretionary (XLY) – 64.9 (neutral)
  • Health Care (XLV) – 60.2 (neutral)
  • Financial (XLF) – 50.5 (neutral)
  • Energy (XLE) – 58.1 (neutral)
  • Gold Miners (GDX) – 28.5 (oversold)
  • Industrial (XLI) – 64.5 (neutral)
  • Materials (XLB) – 57.3 (neutral)
  • Real Estate (IYR) – 78.3 (overbought)
  • Retail (RTH) – 63.1 (neutral)
  • Semiconductor (SMH) – 48.7 (neutral)
  • United States Oil Fund (USO) – 41.1 (neutral)
  • Utilities (XLU) – 64.5 (neutral)

International ETFs

  • Brazil (EWZ) – 29.2 (oversold)
  • China 25 (FXI) – 65.1 (neutral)
  • EAFE (EFA) – 52.4 (neutral)
  • South Korea (EWY) – 42.7 (neutral)

Commodity ETFs

  • Gold (GLD) – 33.9 (neutral)

Ultra Extremes

  • Small Cap Bear 3x (TZA) – 46.2 (neutral)
  • Small-Cap Bull 3x (TNA) – 49.9 (neutral)
  • UltraLong QQQQ (QLD) – 68.2 (neutral)
  • Ultra Long S&P 500 (SSO) – 63.0 (neutral)
  • Ultra Short S&P 500 (SDS) – 36.0 (neutral)
  • UltraShort 20+ Treasury (TBT) – 68.4 (neutral)