High Probability ETF Trading Report: Power to the Preferreds and the Dollar Pullback
During the last few weeks, ETF markets – particularly those linked to equity indexes – have been overbought, persistently, consistently overbought.
This has made for difficult trading for many high probability traders looking to buy markets after they’ve pulled back and sell them into strength. But one of the areas where high probability traders have been able to find more fertile ground has been the ETF market for preferred securities.
Two of the most liquid exchange-traded funds in the preferred securities market are the ^PFF^ (above) and the ^PGX^ (below).
Both funds became oversold above the 200-day moving average around the same time in late March. PFF closed in oversold territory for an eye-popping nine consecutive trading days – PGX for eight out of nine – before buyers stepped in to take advantage of the exceptionally oversold conditions early in the second full trading week of April. PFF and PGX both closed back in overbought territory on Friday and are moving modestly higher early on Monday.
Both funds were picked up as potential opportunities days ago by our High Probability ETF Trading Software (click here to learn more). Three strategies in particular: The %b, Multiple Down Days, and RSI 10/6 Strategies alerted traders to the pullbacks in both PFF and PGX.
Looking forward, the most interesting pullback for high probability traders may be the one in the ^UUP^.
UUP dropped into oversold territory above the 200-day moving average on Friday, and plunged even lower early in trading on Monday. This makes UUP, on an intraday basis, among the most oversold ETFs in our database and an ETF worth watching over the balance of the trading day.
With Larry Connors’ High Probability ETF Trading Software, short term traders have access to the same kind of “buy the selling, sell the buying” trading strategies that professional traders have used successfully for decades.
Click here to start your free trial to Larry Connors’ High Probability ETF Trading Software today!
David Penn is Editor in Chief at TradingMarkets.com.