Market Snapshot 28-09-2015

Use the following table for a quick measure of the markets over a variety of time-frames.

Click the image for a better view…

28-09-2015 13-00-23

 

Equity markets remain bearish across multiple time-frames and the number of Russell3000 stocks which are trading above their 200 day MA has dropped to 31% (a 4% lower reading than last week).

Clearly, the longer-term bias is still to the downside. Having said that, the SPY might find some near-term support at $190.

Looking at the individual sectors, we can see that XLV and IBB are significantly oversold. Historically, buying these ETFs when they have had such a low RSI(4) reading has proven to be profitable if using a quick exit strategy such as the RSI(4) closing back above 40.

A different method for playing a bounce in XLV or IBB is to look at the individual holdings of the respective ETFs and attempt to identify the strongest stocks from each sector (in relative terms).

For example, REGN is stronger than the majority of its Mega Biotech peers, so you might be better off playing a bounce in REGN rather than IBB itself.

REGN at $480.00 would be a fair entry.

For those who’d rather be short than try to catch a bounce, the semiconductor sector has flashed a bearish signal, with CREE continuing to look particularly weak.

 

Cree

 

The last ETF worth mentioning is USO. The energy reading has risen to a very high level so it will come as no surprise if oil were to break out of the recent holding pattern within the next week or so.

The prior trend is down so there is a higher probability that we’ll see USO at $13.00 before we see it at $16.00.

 

USO

Disclosure: I have no current positions in any of the securities mentioned in this article. I might initiate a long position in REGN within the next couple of days.

Update (19:35 GMT, 28-09-2015): I am now long REGN.

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