First, I would like to announce that my new Sector ETF Extremes
Options Strategy began today. As I have stated over the last few posts
the Sector ETF Extremes is a stock options strategy that takes
advantage of short-term overbought/oversold extremes in the market. Our
so-called flagship options strategy the ETF Extremes, based on four of
the most liquid ETFs that represent the major benchmarks (Dow, S&P
500, Russell 2000, and tech-heavy NASDAQ 100) has been extremely (bad
pun I know) successful since its launch back in early 2006 with gains
that exceed 150%. My goal was to take the strategy to the next step by
offering a similar strategy that uses sector ETFs as the underlying
rather than the major benchmarks. If all goes as planned we should
witness a bit more trading in this strategy as we will follow 8-10 of
the most liquid sector ETFs available in the options market.
It has been several weeks since the last trade in the Gap Fade or
ETF Extremes strategy. Again, as I have stated repeatedly over the past
few years in this blog, cash is a position and “patience pays”. My last
post I touched on this concept, “In trading patience is a requirement”.
We could actually see a trade tomorrow in both the ETF Extremes and
Gap Fade options strategies if the PPI report is better than
economists’ expectations. A pleasing report would most likely cause
futures to jump prior to the open which would result in a gap to the
upside. Moreover, this could push some of the major benchmarks,
particularly the tech-heavy NASDAQ 100 into a short-term overbought
extreme. I guess we will see soon enough. As always subscribers will
receive a real-time trade alert if and when a signal is triggered.
All of the sector that I follow for the new Sector ETF Extremes
options strategy remain in a short-term neutral state. Most notable is
the Retail sector (RTH) which has moved to the high-end of a neutral
state while the Industrial sector (XLI) has moved in the opposite
direction and towards the low-end of a neutral state.
Stay tuned and have a wonderful afternoon. If you have any questions
about my options strategies or any options related questions please do
not hesitate to send me an email.
Short-term Overbought/Oversold Levels for June 16, 2008
ETF Extremes Options Strategy
- S&P 500 (SPY) - 47.7 (neutral)
- Dow Jones (DIA) - 45.3 (neutral)
- Russell 2000 (IWM) - 56.8 (neutral)
- NASDAQ 100 (QQQQ) - 55.0 (neutral)
Sector ETF Extremes Options Strategy
- Biotech (IBB) - 54.9 (neutral)
- Consumer Discretionary (XLY) - 52.7 (neutral)
- Health Care (XLV) - 45.0 (neutral)
- Financial (XLF) - 47.3 (neutral)
- Energy (XLE) - 53.0 (neutral)
- Industrial (XLI) - 36.7 (neutral)
- Materials (XLB) - 55.3 (neutral
- Real Estate (IYR) - 57.8 (neutral)
- Retail (RTH) - 60.2 (neutral)
- Utilities (XLU) - 58.4 (neutral)
If you would like to follow my strategies with real-time alerts or
have them autotraded by a participating broker please click the
following link: SUBSCRIBE