ETF Trading with Larry Connors: The News-Driven Market Idles in Neutral Territory

Yesterday’s sell-off was not much of a surprise; as we I mentioned the 2-period RSI of our major ETF Universes had risen from 2 to 80 over the previous three days. The sell-off was a typical bear market decline coming off a short-covering rally.

Today the market is neutral (major RSI readings are mostly in the 40’s and 50’s) and again news events will dictate the action. In early morning trading (at 4:30 am ET), the U.S. indices are up about 1% as positive news is coming out of Europe. The U.S. economic reports will also play a role today as there are three reports that could impact prices.

Overall this has been a very good month for many of our strategies in The Machine and many traders are showing positive returns for the month (some are showing double-digit returns). Depending on how one has built their portfolio, the gains have come from both the long and short side, and the hedging we so emphasize is playing a major role in more and more traders portfolios. It’s very good to see.

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