13 replies to this topic

[acrowder]

The Dow (DIA) has once again moved into ”very overbought” territory” and our shorter-term proprietary indicators are nearing also nearing an extreme. I mentioned yesterday that if the bulls can sustain the positive momentum through tomorrow then we could see a short-term opportunity present itself as early as Friday. Thursday of option expiration week is typically positive and tomorrow is no different as the S&P, Dow and Nasdaq 100 are historically higher 61.9%, 71.4% and 71.4% of the time. Remember, historically if the market is overbought as the market moves into the week of post options expiration a decent short opportunity is usually found. In this case, the large-cap Dow (DIA) looks to be the most favorable for a short play. As you can see below the major indice is already in a “very overbought” state and continued push higher will only increase the probability of a short-term move lower over the short-term (1-5 days). As a trader, it can be frustrating waiting for high-odds set-ups, but as my loyal readers and especially the subscribers to my ETF Extremes strategy have witnessed since the inception of my service, patience pays. Knowing when to sit on your hands is often the most difficult aspect of trading. I will allow the market to make that determination for me over the next few days. Stay tuned! Overbought/Oversold levels for May 16, 2007 SPY - 69.3 (neutral) DIA - 84.0 (very overbought) IWM - 42.7 (neutral) QQQQ - 54.1 (neutral) GLD - 27.2 (oversold) OIH - 70.1 (overbought) Andrew Crowder, Chief Investment Strategist, www.crowderinvestments.com

[Mtrader]

Good. 13750 is definite.

[bullishnot]

Agree, thanks for he post.. dow decline starting very soon.

[Mr Dev]

The Dow (DIA) has once again moved into ”very overbought” territory” and our shorter-term proprietary indicators are nearing also nearing an extreme.

Seems we both are noticing some interesting stuff with the DOW.. and frankly I couldn't be more pleeeased!

[Darris]

When things get overbought, do you have "Power Move" indicators to keep you in the game? Smart Bulls do.

[da_cheif]

The Dow (DIA) has once again moved into ”very overbought” territory” and our shorter-term proprietary indicators are nearing also nearing an extreme. I mentioned yesterday that if the bulls can sustain the positive momentum through tomorrow then we could see a short-term opportunity present itself as early as Friday. Thursday of option expiration week is typically positive and tomorrow is no different as the S&P, Dow and Nasdaq 100 are historically higher 61.9%, 71.4% and 71.4% of the time.

Remember, historically if the market is overbought as the market moves into the week of post options expiration a decent short opportunity is usually found. In this case, the large-cap Dow (DIA) looks to be the most favorable for a short play. As you can see below the major indice is already in a “very overbought” state and continued push higher will only increase the probability of a short-term move lower over the short-term (1-5 days).

As a trader, it can be frustrating waiting for high-odds set-ups, but as my loyal readers and especially the subscribers to my ETF Extremes strategy have witnessed since the inception of my service, patience pays. Knowing when to sit on your hands is often the most difficult aspect of trading. I will allow the market to make that determination for me over the next few days. Stay tuned!

Overbought/Oversold levels for May 16, 2007

SPY - 69.3 (neutral)
DIA - 84.0 (very overbought)
IWM - 42.7 (neutral)
QQQQ - 54.1 (neutral)
GLD - 27.2 (oversold)
OIH - 70.1 (overbought)

Andrew Crowder, Chief Investment Strategist, www.crowderinvestments.com

andrew has no idea whats coming.......read my lips.....THE EPICENTER OF PRIMARY WAVE 3 UP.......geeziz....

[89S10]

Agree, thanks for he post.. dow decline starting very soon.

Mr. Dev:

You said you were pleased, but what is your opinion? Are you closer to Crowder or the Cheif?

[arbman]

Today less issues made new highs compared to the previous few days, the breath momentum is still negative, these set up the divergences for ST. But the speculation was quite bearish in the afternoon, so the squeeze got extended, perhaps it spills over into the morning. Anyhow, let's see if the market internals continue to improve or deteriorate during a pull back tomorrow (likely), the 10 wk cycle low might have some last minute surprises for the bulls. Honestly, this is yet to correct the recent few days of bullish speculation...

[Jnavin]

Andrew's correct, near-term, it's probably a decent shorting opportunity into Friday's scam operations. But I disagree with him that Dow stocks are the best to short under such circumstances. I think the most powerful selling will come in the mid-cap and small-caps. Could be another 2/28 sell-off event coming up in the next 5 to 8 sessions...then back to the big bull market when it's done.

[optionking]

da cheif...when do you see that coming? dont you think we need to relieve the overbought conditions as a precursor to moving up.