As expected, Fed day price action kept in line with the recent past. The day started off range-bound, followed by a decent advance, then chopped around until the Fed release. Once 2:15 EST hit(Fed release), the market vacillated widely, but in the end the price action was mute as market closed the day flat. Nothing gained, nothing lost.
Now the market is firmly entrenched in a neutral state. However, our shortest-term indicators are in an overbought state so I would expect to see a decline, or at least an upside struggle, over the next few trading sessions. The S&P's 50-day moving average is still in play and the bulls and bears are playing a mean game of tug of war. I think this time around the bears are favored.
As I stated yesterday, our condor positions (which were established Monday) are comfortably within our 160 point range. That is right 160 points! We are ecstatic with the position and with the expected returns of over 13% over a four week period. We love to see flat days in a strategy that benefits from time decay. If the VIX holds up premium selling strategies will continue to thrive.
Thank you Mr. Volatility!
The new website is almost complete and we are very excited about the release! As usual, the process has taken a bit longer than expected, but that always seems to be the case when building a site. Our webmaster has outdone himself this time around. We can't wait to share it with you! As always, thank you for your support! We appreciate all of the kind words.
Overbought/Oversold levels for June 27, 2007
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SPY - 47.8 (neutral)
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DIA - 47.3 (neutral)
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IWM - 55.3 (neutral)
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QQQQ - 57.3 (neutral)
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GLD - 47.4 (neutral)
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OIH - 43.2 - (neutral)
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Have a great night!
Andrew Crowder, Chief Investment Strategist,
www.crowderinvestments.com