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Today brings the Fed's QE3 announcement, and yesterday brought the election results. Will it move the market? The VIX certainly thinks so, as it has priced a 2.5% move. At this juncture, the short-term high-probability, mean-reversion indicators are calling for a decline, but as we all know anything can happen in this environment where the government continues to prop up the market day after day.

There really isn't much to say tonight. The indicators state it all. The major market indices, SPY and QQQQ have pushed into a "very overbought" state and some of the leading sectors, namely Energy (NYSEARCA:XLE) has done the same.

Short-Term, High-Probability, Mean Reversion Indicator – as of close 11/02/10

Benchmark ETFs

  • S&P 500 (NYSEARCA:SPY) – 84.0 (very overbought)/ RSI (2) - 97.8
  • Dow Jones (NYSEARCA:DIA) – 70.0 (overbought)
  • Russell 2000 (NYSEARCA:IWM) – 68.5 (neutral)
  • NASDAQ 100 (QQQQ) – 86.9 (very overbought)/ RSI (2) - 95.2

Sector ETFs

  • Biotech (NASDAQ:IBB) –63.2 (neutral)
  • Consumer Discretionary (NYSEARCA:XLY) – 77.1 (neutral)
  • Health Care (NYSEARCA:XLV) – 67.5 (neutral)
  • Financial (NYSEARCA:XLF) – 55.3 (neutral)
  • Energy (XLE) – 77.4 (overbought)/ RSI (2) - 95.5
  • Gold Miners (NYSEARCA:GDX) – 68.8 (neutral)
  • Industrial (NYSEARCA:XLI) – 66.1 (neutral)
  • Materials (NYSEARCA:XLB) – 69.9 (neutral)
  • Real Estate (NYSEARCA:IYR) – 61.6 (neutral)
  • Retail (NYSEARCA:RTH) – 68.2 (neutral)
  • Semiconductor (NYSEARCA:SMH) – 88.3 (very overbought) / RSI (2) – 99.1
  • United States Oil Fund (NYSEARCA:USO) – 68.9 (neutral)
  • Utilities (NYSEARCA:XLU) – 54.3 (neutral)

International ETFs

  • Brazil (NYSEARCA:EWZ) – 69.7 (neutral)
  • China 25 (NYSEARCA:FXI) – 63.4 (neutral)
  • EAFE (NYSEARCA:EFA) – 66.6 (neutral)
  • South Korea (NYSEARCA:EWY) – 65.3 (neutral)

Commodity ETFs

  • Gold (NYSEARCA:GLD) – 61.2 (neutral)

Ultra Extremes

  • Small Cap Bear 3x (NYSEARCA:TZA) – 30.2 (neutral)
  • Small-Cap Bull 3x (NYSEARCA:TNA) – 68.6 (neutral)
  • UltraLong QQQQ (NYSEARCA:QLD) – 87.8 (overbought)/ RSI (2) - 96.3
  • Ultra Long S&P 500 (NYSEARCA:SSO) – 81.4 (neutral)
  • Ultra Short S&P 500 (NYSEARCA:SDS) – 18.8 (very oversold) / RSI (2) - 2.2
  • UltraShort 20+ Treasury (NYSEARCA:TBT) – 38.9 (neutral)

Disclosure: Short SPY and FXI. Long TZA.

Source: Short-Term, High-Probability Mean Reversion Indicator: The Wait Is Over