The strong rally we were anticipating has now played itself out. With prices significantly higher than they were at the bottom last Friday morning, the market is overbought. This does not mean it can’t run higher for a few days, especially if good news comes out of Europe, but it’s getting closer to a short- term top.
The 2-period RSI of our Country Fund Universe has moved from 2.2 last week to above 80 today and is signaling some very early short signals here in a number of markets. As I mentioned, the Daily Battle Plan is going to be expanded to cover more potential set-ups and ideas each day beyond the ETF set-ups. Therefore there are no trade suggestions today; those we will be covering next week. In the meantime, it’s time to start locking in any long gains you may have if you played the rally and start scaling in on the short side.
The above is from Larry Connors’ Daily Battle Plan.
To learn more about the Daily Battle Plan – including access to Larry’s daily ETF trading signals, click here for more information.
And for more on ETF trading, be sure to visit us here to check out the book that Stocks, Futures and Options (SFO) Magazine called one of the best trading books of 2009: High Probability ETF Trading: 7 Professional Strategies to Improve Your ETF Trading.
Larry Connors is founder of TradingMarkets.com