07/16 – ETF Trading – XLU, SDP, SPY, SDS

The broader market ended flat yet again yesterday and is severely over-bought on a short term basis. Notice the high RSI(2) values for XLU and SPY in the charts below. There is no change in our positions.

We have a full short trading position in XLU and we’re just waiting for a stock market sell-off to trigger our etf exit signals. The leveraged trade is in SDP.

We also have a full short trading position in SPY. A stock market sell-off will trigger our etf exit signals. The leveraged trade is in SDS.

Our exit signals are triggered when the closing price for XLU or SPY is lower than it’s MA(5), or – for a potentially larger gain – when the RSI(2) is less than 30. We’re using the latter signal. You’ll exit the leveraged trades on these signals as well.

All etf trades are at the market close. Please trade responsibly. Have a great weekend!

Have questions about the signals? The etf trading details are all in the book by Larry Connors: High Probability ETF Trading. His etf trading strategies have only a few rules and you’ll be able to back-test and apply the strategies to the next trading day. With easy to follow signals, clear explanations, and years of tested results, there is no better place to start finding new trading edges than in High Probability ETF Trading – now in paperback.

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