Yes, another successful trade in the NASDAQ 100 (QQQQ) Gap Fade
options strategy today. The market moved sharply lower at the open and
as a result a signal was triggered in the Gap Fade strategy. About 90
minutes later I was out of the trade for a 6% gain on the day. Check out the details of the trade here.
It was the 8th trade of the year. Yes, I have only been exposed to
this market for all of 8 days in the Gap Fade strategy. Amazing, eh.
Some of you are slowly catching on; trading every day or just using an
options strategy that exposes you to the market on a daily basis will
eventually catch-up to you. If you feel like you must have action every
day then why not at least hedge your strategies with one of mine? As I
always say the performance speaks for itself.
I am so incredibly enthused by the response to the strategies as of late. Thank you all for the kind words.
As for the current market, well, IWM is looking pretty sweet right
now. The small-cap index has pushed into a short-term overbought state
and my shortest-term overbought/oversold measures have moved to
overbought levels not seen in well over a year.
Moreover, the several of the sectors I follow have pushed into an
overbought state so we could finally see our first Sector ETF Extremes
trade. No hurry remember. Patience. Wait for the probability to lean
heavily to your side. Opportunities are made up easier than losses.
Oh yeah, I almost forgot, Gap Fade subscribers while you are
enjoying the rewards of the strategy don’t get to comfortable. If the
market jumps higher at the open tomorrow we could be in for another
signal and another opportunity at some nice gains. Upside gaps into
“very overbought” states are some of my favorite set-ups.
As always subscribers, I will send you out a real-time trade alert with all of the necessary info if and when a signal occurs.
Until then enjoy the profits and have a great afternoon!
Overbought/Oversold levels for July 22, 2008
ETF Extremes Options Strategy
* S&P 500 (SPY) - 70.5 (overbought)
* Dow Jones (DIA) - 72.9 (overbought)
* Russell 2000 (IWM) - 82.6 (very overbought)
* NASDAQ 100 (QQQQ) - 45.8 (neutral)
Sector ETF Extremes Options Strategy
* Biotech (IBB) - 81.5 (very overbought)
* Consumer Discretionary (XLY) - 66.8 (neutral)
* Health Care (XLV) - 58.4 (neutral)
* Financial (XLF) - 77.1 (overbought)
* Energy (XLE) - 35.5 (neutral)
* Industrial (XLI) - 71.6 (overbought)
* Materials (XLB) - 65.1 (neutral)
* Real Estate (IYR) - 74.7 (overbought)
* Retail (RTH) - 35.4 (neutral)
* Utilities (XLU) - 37.0 (neutral)
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