Three little ETFs went to the market…

THE TRADING STRATEGY

Short-term swing trading: When the NYMO turns up, it is time to buy ETFs on the next open. When the NYMO turns down it is time to sell ETFs on the next open.

Longer-term swing trading: When the NYSI turns up it is time to buy ETFS on the next open. When the NYSI turns down, it is time to go to cash or to go short on the next open.

Almost all ETFs are set to move with the market, up or down. Best done with leverage.

Simple as that.

However there are exceptions.

This is one of those times. Or I should say that time was the past three days leading into today.

My Nifty50StockList had 40 or more stocks on sells for those three days, with as many as 36 oversold (that’s a lot). If one recalls from previous posts here, I have said “40 or more stocks on that list on sells is the bottom of a down swing or the beginning of the bottom.”

In addition, all of the ten leveraged ETFs I follow— most notably, TQQQ, SOXL, FNGU — have also been on sells and oversold.

That is a downside condition that is not sustainable and leads, at any second or any day, to at least a bounce in the market.

We got that bounce today after a serious gap down overnight in the futures market flushed out the last of the sellers for the time being.