Short-Term, High-Probability Mean Reversion Indicator: The Next Two Days Will Be Pivotal

|
Includes: DIA, EEM, EFA, EWY, EWZ, FXI, GDX, GLD, IBB, IWM, IYR, QLD, QQQ, RTH, SDS, SMH, SPY, SSO, TBT, TNA, TZA, USO, VXX, XLB, XLE, XLF, XLI, XLU, XLV, XLY
by: Andrew Crowder

As I am sure all of you know by now, today is pivotal for the market. The elections and QE2 will be announced (QE2 might be Wednesday) and of course, everyone has their own opinion as to why the market should go up or down after the smoke has cleared. I think we are due for a correction, as indicated by my short positions in SPY and FXI. I also have a long position in TZA.

Unfortunately, I do not have a crystal ball. I will try and get back today with another post. Stay tuned.

Short-Term, High-Probability, Mean Reversion Indicator – as of close 11/01/10

Benchmark ETFs

  • S&P 500 (NYSEARCA:SPY) – 66.3 (neutral)
  • Dow Jones (NYSEARCA:DIA) – 55.0 (neutral)
  • Russell 2000 (NYSEARCA:IWM) – 39.0 (neutral)
  • NASDAQ 100 (QQQQ) – 76.5 (overbought)

Sector ETFs

  • Biotech (NASDAQ:IBB) –53.1 (neutral)
  • Consumer Discretionary (NYSEARCA:XLY) – 61.7 (overbought)
  • Health Care (NYSEARCA:XLV) – 48.4 (neutral)
  • Financial (NYSEARCA:XLF) – 45.5 (neutral)
  • Energy (NYSEARCA:XLE) – 58.6 (neutral)
  • Gold Miners (NYSEARCA:GDX) – 64.6 (neutral)
  • Industrial (NYSEARCA:XLI) – 43.8 (neutral)
  • Materials (NYSEARCA:XLB) – 58.4 (neutral)
  • Real Estate (NYSEARCA:IYR) – 51.6 (neutral)
  • Retail (NYSEARCA:RTH) – 38.8 (neutral)
  • Semiconductor (NYSEARCA:SMH) – 86.4 (very overbought) / RSI (2) – 98.1
  • United States Oil Fund (NYSEARCA:USO) – 60.1 (neutral)
  • Utilities (NYSEARCA:XLU) – 24.4 (oversold)

International ETFs

  • Brazil (NYSEARCA:EWZ) – 59.0 (neutral)
  • China 25 (NYSEARCA:FXI) – 49.8 (neutral)
  • EAFE (NYSEARCA:EFA) – 42.7 (neutral)
  • South Korea (NYSEARCA:EWY) – 57.8 (neutral)

Commodity ETFs

  • Gold (NYSEARCA:GLD) – 56.3 (neutral)

Ultra Extremes

  • Small Cap Bear 3x (NYSEARCA:TZA) – 59.6 (neutral)
  • Small-Cap Bull 3x (NYSEARCA:TNA) – 37.6 (neutral)
  • UltraLong QQQQ (NYSEARCA:QLD) – 77.5 (overbought)
  • Ultra Long S&P 500 (NYSEARCA:SSO) – 63.3 (neutral)
  • Ultra Short S&P 500 (NYSEARCA:SDS) – 36.4 (neutral)
  • UltraShort 20+ Treasury (NYSEARCA:TBT) – 57.9 (neutral)

Disclosure: Short SPY and FXI. Long TZA.