ETF Trading with Larry Connors: Overbought Conditions Anticipate Near Term Pullback
Yesterday I mentioned Europe would continue to dominate this week and this is how it’s playing out this morning.
Today it’s Germany and the continued problems seem to move from one nation to the next. Unlike the situations with the other nations, Germany’s growth situation is certainly going to weigh on things greater because the other European nations have looked to them as the lead solution.
Today the markets come into the day very overbought. Both the Country Fund ETF Universe and the Main ETF Universe have 2-period RSI readings above 80. This is telling us a short-term high is very near and a normal pullback is expected. There was a lot of short-covering and panic buying
(especially from fund managers who were afraid of missing the move) and many are now back to being heavily invested again.
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 and CEO of TradingMarkets.com.