Short-Term, High-Probability Mean-Reversion Indicator: Gold, Oil and Natural Gas Move Into Short-Term Extremes

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

The stock market opened the day lower and toiled around negative territory in the early part of the trading session, but bounced hard during mid-day to finish in positive territory.

As a result, gold (GLD, gold miners (NYSEARCA:GDX), oil (NYSEARCA:USO) and natural gas (NYSEARCA:UNG) pushed into a short-term extreme.

Natural Gas is the one to watch here. Given that the High-Probability, Mean-Reversion Indicator has pushed into a short-term extreme and that the RSI (2) has moved above 99, it is highly plausible that a short-term reprieve is near (1-3 days).

Stay tuned.

(Click chart to enlarge)

Disclosure: I have no positions in any stocks mentioned, but may initiate a short position in UNG over the next 72 hours.