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The Top Five Overbought ETFs in Today’s Market

After a month long correction, the S&P has managed to bounce slightly higher, but that hasn’t stopped some of the ETFs I follow from pushing into a short-term overbought state. And not only are a few of these ETFs in a short-term overbought state, but the major market indices are back at areas of very strong overhead resistance. Couple a short-term overbought state with strong overhead resistance and we could see some short-term weakness going forward.

Again, 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:

  • Proshares Ultrashort 20-year Treasuries (TBT)            97.8 (very overbought)
  • SPDR Consumer Dis (XLY)                                         92.6 (overbought)
  • SPDR Homebuilders (XHB)                                         91.2 (overbought)
  • SPDR Consumer Staples (XLP)                                    92.7 (overbought)
  • SPDR Financials (XLF)                                                90.7 (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 11 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

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