Prioprietary Indicators At Extreme Levels

Today was rather interesting because something happened that I didn’t expect it to. I actually bought some long ETF’s, just when I said I wasn’t going to yesterday. Not only that, I’ve been so busy lately that I got my days confused, and in my mind I thought the unemployment report was released this morning. So here I am holding long positions on the eve of a big economic report and the only saving grace is that my position sizes are quite small.

As to why I opted to take a chance on the long side is as the markets were selling off this morning I noticed that my proprietary indicators have reached levels that I’ve never seen since I started tracking them over 2 years ago. Basically I felt that we were oversold yesterday and with the Nasdaq down 30 points in the a.m. I started to feel a bounce is going to occur because we were extremely oversold. Looking at the first chart below, think of the very top of the green box as support for now, with the bottom being my stop. That is the amount I’m going to risk on this trade. I’m not very comfortable being in this trade with the news coming out before the bell, and I somewhat feel that I’m the only person buying stocks right now.

This was purely a trade based on intuition and I wouldn’t be surprised to see this make a double bottom before heading higher.

nasd