Several of the ETFs I follow in the High-Probability, Mean Reversion strategy have hit a short-term “very overbought” extreme. Typically, when this type of event occurs a short-term reprieve (1-3 days) is right around the corner.
Unemployment numbers are out before the bell today so I expect to see a pop at the open. If the market opens higher today I expect to make a trade in the strategy, so subscribers stay tuned.
I currently have a trade on, so of course, a move lower at the open would not upset me either. I expect today will be a very interesting day.
Short-Term High-Probability, Mean-Reversion Indicator – as of close 3/31/11
Disclosure: I am short SPY.