Mr. Market is at it again.
After a brief correction on 9/25, the S&P has managed to climb slightly higher, but that hasn’t stopped some of the ETFs I follow from pushing into a short-term overbought state.
Many of the ETFs I follow for the Options Advantage service have pushed into a short-term “very overbought” so while the rally in the ETFs mentioned below looks strong, I do expect a retreat or at minimum a pause over the next week or so.
Some of the most short-term overbought ETFs at the moment are:
- SPDR S&P Financia ETF (XLF) 97.8 (very overbought)
- Direxion Fin. Bull Shares 3x (FAS) 97.4 (very overbought)
- SPDR Health Care (XLV) 97.1 (very overbought)
- SPDR Consumer Staples (XLP) 98.5 (very overbought)
- SPDR S&P 500 (SPY) 95.8 (very overbought)
The aforementioned ETFs are just a few of the highly-liquid, overbought ETFs I follow in the market. In fact, out of the 40 ETFs that I follow for the Options Advantage service 16 are in an extreme overbought state.
Typically, when this type of overbought set-up occurs I will fade the market by selling bear call spreads with a high-probably of success.
If you would like to learn more about the strategies I use in the Options Advantage service please do not hesitate to email me at email@example.com.