Tomorrow promises to be very interesting. On a technical basis, the major benchmarks that we follow are nearing short-term extremes and another push lower would certainly in oversold territorry. Typically, when the overall market reaches this type of extreme a short-term bounce (1-5 days) is to be expected.
We have managed to miss the entire move in our ETF Extremes strategy which proves that being in cash IS a position. If the aforementioned situation occurs (market pushes into very oversold territory) we could see a signal in the strategy. As always, we will let our paid subscribers know (in real-time) once/if we take a position.
As for our Iron Condor strategy, the underlying SPX is once again nearing the short strike of our bull put spread. We are still have 1.5% of wiggle room, but as most of you know, in this current volatile market 1.5% is not much of a cushion. As I said earlier tomorrow promises to be very interesting.
Oversold/Overbought for August 14, 2007
SPY - 30.7 (neutral)
IWM - 34.3 (neutral)
DIA - 29.1 (oversold)
QQQQ - 30.4 (neutral)
GLD - 50.5 (neutral)
OIH - 35.1 (neutral)
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Andrew Crowder, www.crowderinvestments.com