Short-Term, High-Probability Mean-Reversion Indicator: Overbought and Ready

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

Thursday the bulls continued their recent push and now just as the market is ready to absorb another jobs report, the majority of the ETFs I follow using my short-term indicators have moved into an overbought state.

Yes, finally after three weeks of patiently waiting on the sidelines while the market muddled around in a fairly tight range the High-Probability, Mean-Reversion Strategy could have a signal forthcoming.

In most cases, I would have placed a trade at the end of the day, but given the upcoming jobs report out tomorrow before the open I decided to wait on the sidelines. Remember, opportunities are made up easier than losses. As with any good trading strategy, patience is key.

So, if we happen to open higher today, I will be sending out a trade alert to my loyal paid subscribers.

Short-Term High-Probability, Mean-Reversion Indicator – as of close 12/02/10

Benchmark ETFs

* S&P 500 (NYSEARCA:SPY) – 72.4 (overbought)
* Dow Jones (NYSEARCA:DIA) –71.9 (overbought)
* Russell 2000 (NYSEARCA:IWM) – 75.2 (overbought)

* NASDAQ 100 (QQQQ) – 67.9 (neutral)

Sector ETFs

* Biotech (NASDAQ:IBB) – 59.5 (neutral)
* Consumer Discretionary (NYSEARCA:XLY) – 77.4 (overbought)
* Health Care (NYSEARCA:XLV) – 64.0 (neutral)
* Financial (NYSEARCA:XLF) – 72.2 (overbought)
* Energy (NYSEARCA:XLE) – 77.4 (overbought)
* Gold Miners (NYSEARCA:GDX) – 74.3 (overbought)
* Industrial (NYSEARCA:XLI) – 79.9 (overbought)
* Materials (NYSEARCA:XLB) – 76.7 (overbought)
* Real Estate (NYSEARCA:IYR) – 72.3 (overbought)
* Retail (NYSEARCA:RTH) – 82.1 (very overbought)
* Semiconductor (NYSEARCA:SMH) – 78.1 (overbought)
* United States Oil Fund (NYSEARCA:USO) – 73.1 (overbought)
* Utilities (NYSEARCA:XLU) – 61.3 (neutral)

International ETFs

* Brazil (NYSEARCA:EWZ) – 64.6 (neutral)
* China 25 (NYSEARCA:FXI) – 62.1 (neutral)
* EAFE (NYSEARCA:EFA) – 61.0 (neutral)
* South Korea (NYSEARCA:EWY) – 65.9 (neutral)

Commodity ETFs

* Gold (NYSEARCA:GLD) – 64.6 (neutral)

Ultra Extremes

* Small Cap Bear 3x (NYSEARCA:TZA) – 24.1 (oversold)
* Small-Cap Bull 3x (NYSEARCA:TNA) – 75.7 (overbought)
* UltraLong QQQQ (NYSEARCA:QLD) – 67.8 (neutral)
* Ultra Long S&P 500 (NYSEARCA:SSO) – 72.1 (overbought)
* Ultra Short S&P 500 (NYSEARCA:SDS) – 26.9 (oversold)
* UltraShort 20+ Treasury (NYSEARCA:TBT) – 59.2 (neutral)

Disclosure: No position