(T2108 measures the percentage of stocks trading above their respective 40-day moving averages [DMAs]. To learn more about it, see my T2108 Resource Page.)
T2108 Status: 30% and neutral.
VIX Status: 19; below last oversold period
General (Short-term) Trading Call: Hold (or lock in some profits to allow you the comfort to continue holding remaining trading longs until they test some natural line of resistance).
Commentary
A relatively uninteresting day as T2108 drifted downward to 30%. The Federal Reserve’s statement on monetary policy did produce a weak close as traders headed for the exits in the wake of Bernanke’s somber assessment of the economy. Overall, not much has changed from yesterday’s T2108 update. Note that T2108 is not likely to provide any new information until/unless it makes a significant move up or down or develops a significant divergence from the performance of the S&P 500.
In the meantime, I will be watching currency markets with the expectation that a stronger dollar will signal trouble for stocks. In tandem, I will watch to see whether the VIX regains momentum as a potential confirmation of trouble. Above all, we must place the current sell-off in context. It fortuitously ended at the dual support of the March lows and the 200DMA. To break those supports, sellers will likely need a new, previously unanticipated (or largely ignore or under-estimated) catalyst. Remember, since the March lows, every single sell-off in the market has produced very profitable buying opportunities. So, we should not be surprised when this “training” exerts its influence at important junctures in the market.
Charts below are the latest snapshots of T2108 (and the S&P 500)
Refresh browser if the charts are the same as the last T2108 update.
Daily T2108 vs the S&P 500
Black line: T2108 (measured on the right); Red line: S&P 500 (for comparative purposes)
Weekly T2108
*All charts created using TeleChart:
Related links:
The T2108 Resource Page
Expanded daily chart of T2108 versus the S&P 500
Expanded weekly chart of T2108
Be careful out there!
Full disclosure: long SSO puts, long AAPL calls
What strike price are your long calls in AAPL and which month. Do you share options related information on your blog ?
Thanks
Sure. As I stated in a previous post, the trade ended up being a dud. Good timing, poor choice in trading vehicle! I bought a weekly June 24th $335 call. It is still worth something, but I still need another day like Tues or Thurs to make money! Lesson learned – buy a few shares next time I am this confident on a trade (I did do a day trade that paid for most of the cost of the call).
By the way, I sold at the open and salvaged some of the value of the calls. I was surprised that they weren’t zero!