etfmsolutions: M6 Favors XLU....03.17.16

Thursday, March 17, 2016

M6 Favors XLU....03.17.16

The rally today (surprising to me) has now pushed SPY into EXTREMELY overbought territory with the RSI2 at 95. Yes, we could actually push to 208...stranger things have happened....but the low volume recent gains have been climbing over a wall of worry with little regard and tomorrow's option expiration should give us a better indication of how much of the action has been short covering and how much has been real accumulation.
The FED's dovish tone yesterday was ostensibly the catalyst for today's positive reversal but we also saw a number of afternoon reversals that suggest points of weakness that may soon expand to other sectors. Gold and oil have also been screamers recently but the jury is still out on whether a true bottom has been hit or whether the Saudis and other Mid East suppliers are just playing gamesmanship with the market in the short run..
XLU of course is EXTREMELY overbought times 2...but it keeps going up....far beyond technical expectations. For now its the momentum pivot to keep your eye on..

Commentary and Updates

Mosaic Solutions commentary is typically published daily as time permits and market action warrants.
Posts feature Mosaic model updates including delta neutral stops, VIXEN directional trades and PONZO forecasts.

NOTE: Posted risk exposure indicators, signals and metrics apply to Mosaic models only. They are not directly correlated with price movement in the major market indices and can not be used to forecast directional changes in those instruments.
Each Mosaic model is a unique blend of risk factors and must be treated accordingly.

TRENDX is a proprietary Mosaic market signal that blends volume, RSI, momentum and rate of change.

ETF Mosaic Solutions and the editors of Mosaic Solutions are neither an investment advisory service nor registered investment advisers or broker-dealers and do not purport to tell or suggest which securities or currencies readers should buy or sell for themselves.
This site and related software products are for research and educational purposes only, and nothing herein should be construed as an offer to buy or sell, or as a solicitation of an offer to buy or sell securities, or to provide individual investment advice.

Investing is risky and past performance, whether actual or tested, is no guarantee of future results.
Any quantitatively derived allocations referenced herein should only be starting points for conducting your own research.

You are responsible for your own trading decisions and resultant gains or losses. When in doubt, please seek professional guidance from a registered adviser who can respond to your personal needs and risk profile.