The recent overbought conditions finally caught up with the market with the most overbought indices (QQQQ) taking the biggest hit. My thought is that the decline today could potentially lead to more losses over the short-term. I expect to see the major indices move into oversold territory before the bulls decide to test the waters.
Tomorrow is options expiration so anything can happen. Typically we see the market move slightly higher as the day progresses. Sorry for keeping it so short tonight. I am working on the upcoming newsletter and the new stock-based ETF strategy.
Also, we have been receiving lots of email about the Short Iron Condor that we offer in the newsletter and our White Paper. It seems as though a few of our subscribers have had kind things to say about our service (in various message boards) and in particular, the in-depth approach to the Short Iron Condor strategy. Several of you have asked if we will be offering a separate strategy that could be auto-traded so we are considering that as an option. Although, we already give the trade details in our newsletter before the new expiration period begins so we are still uncertain if we want to offer it as an auto-traded strategy. We will keep you abreast of our thoughts.
Oversold/Overbought levels for January 18, 2007
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SPY - 55.4 (neutral)
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DIA - 66.1 (neutral)
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IWM - 39.1 (neutral)
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QQQQ - 35.6 (neutral)
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OIH - 39.3 (neutral)
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GLD - 60.6 (neutral)
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Have a great night!
Andrew Crowder, Chief Investment Strategist, www.crowderinvestments.com