The S&P sold off this morning until it hit what has been a strong level of support. Today was the fourth time in five days that sellers have attempted to move the major indice lower without much success. Buyers keep stepping in at roughly the 144.30 area (SPX 1444) which has been extremely frustrating for the bears. SPY is still trading in a fairly tight range for the last five days.
Could this be the calm before the storm or just another pause on the way up? I can't remember the last time I have witnessed so many bearish indicators move into extreme territory at the same time. The bears have been piling up indicators for several months now without much notice from the bulls. This is why it pays to be careful at this juncture. Remember, we as investors/traders are in this for the long haul so why take an unneeded risk when the risk/reward scenario is not leaning in your favor. I continue to side with the bears over the short-term so I am still considering taking a position, but only if the underlying of my choice experiences price action that meets my demands. As we all know Mr Market can change overnight, so be nimble and stay alert. Capital preservation and money management combined with a patient approach are the keys to success.
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I would also like to let everyone know that we will be offering the opportunity to have our Short Iron Condor auto-traded. We will be limiting the amount of subscribers to 75 so spots will go quickly. If you wish to participate email us at
support@crowderinvestments.com
and we will do our best to save you a spot once we make the portfolio live, which will occur after the March expiration cycle.
Overbought/Oversold levels for February 8, 2007
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SPY - 73.1 (overbought)
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DIA - 57.5 (neutral)
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IWM - 81.6 (neutral)
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QQQQ - 71.3 (overbought)
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OIH - 71.8 (overbought)
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GLD - 73.5 (overbought)
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Have a great night!
Andrew Crowder, Chief Investment Strategist,
www.crowderinvestments.com