Monday, June 16, 2008

Quick Update on Short Term Model

Today the short term model got clearly overbought or "too high." I had traded the oversold signal last week using QQQQ call options and sold them today for 25% gain. I considered posting a trade on DXD to the blog, but there is something telling me that the markets could have some more upside in them, even if they continue down the next couple weeks.

The short term selling extremes last week brought lots of pessimism back into the market, which may put a short term halt to selling. And based off the low breadth readings, I have seen some other bloggers post past returns after such poor breadth which indicated very positive results up to 10-12 days later. So I don't want to jump the gun. If the markets rise further and create an even stronger overbought signal while remaining in a clear dwontrend, then I will post a new ETF trade.

Pete

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