• 
• See all for Wyatt Investment Research
• View Print Version

• Subscribe to The Daily Profit
• An Eerie Consumer Confidence Parallel
• Facebook (FB) Shares Hit Four-Month High

• TBT 0% Rate It
• XHB 100% Rate It
• XLF 0% Rate It
• XLP 100% Rate It
• XLY 0% Rate It

After a month long correction, the S&P has managed to bounce slightly higher, but that hasn't stopped some of the ETFs I follow from pushing into a short-term overbought state. And not only are a few of these ETFs in a short-term overbought state, but the major market indices are back at areas of very strong overhead resistance. Couple a short-term overbought state with strong overhead resistance and we could see some short-term weakness going forward.

Again, many of the ETFs I follow for the Options Advantage service have pushed into a short-term "very overbought" so while the rally in the ETFs mentioned below looks strong, I do expect a retreat or at minimum a pause over the next week or so.

Some of the most short-term overbought ETFs at the moment are:

• Proshares Ultrashort 20-year Treasuries ( TBT )            97.8 (very overbought)
• SPDR Consumer Dis ( XLY )                                         92.6 (overbought)
• SPDR Homebuilders ( XHB )                                         91.2 (overbought)
• SPDR Consumer Staples ( XLP )                                    92.7 (overbought)
• SPDR Financials ( XLF )                                                90.7 (overbought)

The aforementioned ETFs are just a few of the highly-liquid, overbought ETFs I follow in the market. In fact, out of the 40+ ETFs that I follow for the Options Advantage service 11 are in an extreme overbought state.

Typically, when this type of overbought set-up occurs I will fade the market by selling bear call spreads with a high-probably of success.

If you would like to learn more about the strategies I use in the Options Advantage service please do not hesitate to email me at optionsadvantage@wyattresearch.com .

Related Stocks Articles

• 
  Skechers Now in Neutral Lane - Analyst Blog
  5/20/2013 04:03 PM
• 
  BP Wins Brazilian Acreage - Analyst Blog
  5/20/2013 04:03 PM
• 
  Kinder Unit and Mitsubishi Team Up - Analyst Blog
  5/20/2013 04:03 PM