Even though the tech-heavy QQQQ and its aggressive counterpart QLD remain in an overbought state, I am now solely focused on SMH for a new short position. The Semiconductor ETF (NYSEARCA:SMH) has moved into a “very overbought” state with a RSI (2) reading of 97.5. Both QQQQ and QLD moved lower Friday which lowered the RSI (2) of both, but kept the high-i indicator above 75. I like to see an RSI (2) reading above 95 before I begin to take a look at the trade.
Subscribers, be on the lookout for a trade alert tomorrow. The S&P futures again as I write this, so tomorrow could be the day that I finally take my lumps on my SPY trades. I might keep my DEc10 SPY puts, but I think the others have to go. Also, have to pull the plug on my TZA trade. FXI is up in the air as I have a 48.7% profit on the trade right now, but with the futures higher I would imagine we will the FXI move in sync.
Short-Term, High-Probability, Mean Reversion Indicator – as of close 10/29/10
- S&P 500 (NYSEARCA:SPY) – 65.0 (neutral)
- Dow Jones (NYSEARCA:DIA) – 54.7 (neutral)
- Russell 2000 (NYSEARCA:IWM) – 51.9 (neutral)
- NASDAQ 100 (QQQQ) – 75.4 (overbought)
- Biotech (NASDAQ:IBB) –64.7 (neutral)
- Consumer Discretionary (NYSEARCA:XLY) – 68.1 (overbought)
- Health Care (NYSEARCA:XLV) – 48.4 (neutral)
- Financial (NYSEARCA:XLF) – 45.3 (neutral)
- Energy (NYSEARCA:XLE) – 55.4 (neutral)
- Gold Miners (NYSEARCA:GDX) – 65.6 (neutral)
- Industrial (NYSEARCA:XLI) – 43.8 (neutral)
- Materials (NYSEARCA:XLB) – 59.4 (neutral)
- Real Estate (NYSEARCA:IYR) – 33.9 (neutral)
- Retail (NYSEARCA:RTH) – 37.5 (neutral)
- Semiconductor (SMH) – 85.4 (very overbought) / RSI (2) – 97.5
- United States Oil Fund (NYSEARCA:USO) – 41.5 (neutral)
- Utilities (NYSEARCA:XLU) – 43.5 (neutral)
- Brazil (NYSEARCA:EWZ) – 49.0 (neutral)
- China 25 (NYSEARCA:FXI) – 34.4 (neutral)
- EAFE (NYSEARCA:EFA) – 49.0 (neutral)
- South Korea (NYSEARCA:EWY) – 43.3 (neutral)
- Gold (NYSEARCA:GLD) – 64.2 (neutral)
- Small Cap Bear 3x (NYSEARCA:TZA) – 45.9 (neutral)
- Small-Cap Bull 3x (NYSEARCA:TNA) – 50.0 (neutral)
- UltraLong QQQQ (NYSEARCA:QLD) – 77.4 (overbought)
- Ultra Long S&P 500 (NYSEARCA:SSO) – 61.9 (neutral)
- Ultra Short S&P 500 (NYSEARCA:SDS) – 37.0 (neutral)
- UltraShort 20+ Treasury (NYSEARCA:TBT) – 53.1 (neutral)
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Disclosure: Short SPY and FXI. Long TZA.