{"id":11139,"date":"2012-04-21T19:57:50","date_gmt":"2012-04-21T23:57:50","guid":{"rendered":"http:\/\/drduru.com\/onetwentytwo\/?p=11139"},"modified":"2012-04-21T19:57:50","modified_gmt":"2012-04-21T23:57:50","slug":"t2108-update-120420","status":"publish","type":"post","link":"https:\/\/drduru.com\/onetwentytwo\/2012\/04\/21\/t2108-update-120420\/","title":{"rendered":"T2108 Update &#8211; April 20, 2012 (A Churning Week: Bulls Cling, Bears Hope)"},"content":{"rendered":"<p>(T2108 measures the percentage of stocks trading above their respective 40-day moving averages [DMAs]. To learn more about it, see my <a href=\"http:\/\/www.drduru.com\/money\/T2108.htm\">T2108 Resource Page<\/a>. You can <a href=\"http:\/\/twitter.com\/#!\/search\/%23T2108\">follow real-time T2108 commentary<\/a> on twitter using the #T2108 hashtag. T2108-related trades and other trades are posted on twitter using <a href=\"http:\/\/twitter.com\/#!\/search\/%23120trade\" target=\"_blank\">the #120trade hashtag<\/a>)<\/p>\n<p><strong>T2108 Status<\/strong>: 39%<br \/>\n<strong>VIX Status<\/strong>: 17.4%<br \/>\n<strong>General (Short-term) Trading Call<\/strong>: Hold. (<a href=\"http:\/\/twitter.com\/#!\/search\/%23120trade\" target=\"_blank\">click here<\/a> for a trading summary posted on twitter)<br \/>\n<strong>Reference Charts<\/strong> (click for view of last 6 months from Stockcharts.com):<br \/>\n<a href=\"http:\/\/stockcharts.com\/h-sc\/ui?s=$SPX&#038;p=D&#038;st=2011-10-20&#038;en=2012-04-20&#038;id=p14085208538\" title=\"6-month chart of the S&#038;P 500\" target=\"_blank\">S&#038;P 500<\/a> or <a href=\"http:\/\/stockcharts.com\/h-sc\/ui?s=SPY&#038;p=D&#038;st=2011-10-20&#038;en=2012-04-20&#038;id=p14085208538\" title=\"6-month chart of SPY\" target=\"_blank\">SPY<\/a><br \/>\n<a href=\"http:\/\/stockcharts.com\/h-sc\/ui?s=SDS&#038;p=D&#038;st=2011-10-20&#038;en=2012-04-20&#038;id=p15880085697\" title=\"6-month chart of SDS\" target=\"_blank\">SDS<\/a> (ProShares UltraShort S&#038;P500)<br \/>\n<a href=\"http:\/\/stockcharts.com\/h-sc\/ui?s=$USD&#038;p=D&#038;st=2011-10-20&#038;en=2012-04-20&#038;id=p25615696567\" title=\"6-month chart of the U.S. dollar\" target=\"_blank\">U.S. Dollar Index<\/a> (volatility index)<br \/>\n<a href=\"http:\/\/stockcharts.com\/h-sc\/ui?s=$VIX&#038;p=D&#038;st=2011-10-20&#038;en=2012-04-20&#038;id=p25615696567\" title=\"6-month chart of the VIX\" target=\"_blank\">VIX<\/a> (volatility index)<br \/>\n<a href=\"http:\/\/stockcharts.com\/h-sc\/ui?s=VXX&#038;p=D&#038;st=2011-10-20&#038;en=2012-04-20&#038;id=p15880085697\" title=\"6-month chart of VXX\" target=\"_blank\">VXX<\/a> (iPath S&#038;P 500 VIX Short-Term Futures ETN)<br \/>\n<a href=\"http:\/\/stockcharts.com\/h-sc\/ui?s=EWG&#038;p=D&#038;st=2011-10-20&#038;en=2012-04-20&#038;id=p15880085697\" title=\"6-month chart of EWG\" target=\"_blank\">EWG<\/a> (iShares MSCI Germany Index Fund)<br \/>\n<a href=\"http:\/\/stockcharts.com\/h-sc\/ui?s=CAT&#038;p=D&#038;st=2011-10-20&#038;en=2012-04-20&#038;id=p15880085697\" title=\"6-month chart of CAT\" target=\"_blank\">CAT<\/a> (Caterpillar)<\/p>\n<p><strong>Commentary<\/strong><br \/>\nI picked a perfect week to put the T2108 Update on a brief hiatus. While T2108 moved up from 31% to the current 39%, the S&#038;P 500 essentially ended the week flat. Tuesday&#8217;s big rally was erased at the lows on Thursday. It was a churn-filled week that remarkably took place just above the lingering support provided by the May, 2011 highs (again, you can&#8217;t make this stuff up!). The 50DMA has also joined the forces in an attempt to firm up support. This sets up a potentially tension-filled week as bulls cling to support, unable to generate fresh upward momentum, and bears hope, unable to deliver a decisive plunge through support.<\/p>\n<p><center><br \/>\n<figure id=\"attachment_11154\" aria-describedby=\"caption-attachment-11154\" style=\"width: 490px\" class=\"wp-caption aligncenter\"><a href=\"http:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2012\/04\/120420_SP500.png\"><img loading=\"lazy\" decoding=\"async\" src=\"http:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2012\/04\/120420_SP500.png\" alt=\"Support continues to hold for the S&amp;P 500\" title=\"Support continues to hold for the S&amp;P 500\" width=\"500\" height=\"350\" class=\"size-full wp-image-11154\" srcset=\"https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2012\/04\/120420_SP500.png 500w, https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2012\/04\/120420_SP500-300x210.png 300w\" sizes=\"auto, (max-width: 500px) 100vw, 500px\" \/><\/a><figcaption id=\"caption-attachment-11154\" class=\"wp-caption-text\">Support continues to hold for the S&P 500<\/figcaption><\/figure><br \/>\n<\/center><\/p>\n<p>The volatility index, the VIX, did end the week lower. The 50DMA has provided reliable support during this time. This has caused VXX to cool off after a vigorous rally off the March lows. Finally, the CAT-watch is at a &#8220;yellow flag&#8221; status as the stock continues to hover below the 50DMA. Bears should be eager to short here while bulls must hope that CAT can break through resistance. I highly doubt the general market will leave CAT behind, so I will be watching CAT even more closely in the coming week.<\/p>\n<p>Options expiration sent out two batches of SSO calls and one batch of VXX puts worthless. This was the first major setback in the T2108 trades since <a href=\"http:\/\/drduru.com\/onetwentytwo\/2012\/03\/18\/t2108-update-120316\/\" target=\"_blank\">I changed my strategy in mid-March<\/a>. Going forward I am toning down the aggressiveness of the bullish plays. The market is in a kind of limbo and it does not make sense to go after any direction until I get a signal to do otherwise. I am also keenly aware of the danger in a market that appears to lose momentum after a strong rally. The market needs a new catalyst, and I am not sure what that will be.<\/p>\n<p>In the meantime, the foreign exchange markets (forex) keep sending me warning signs that are further dampening my enthusiasm for aggressively bullish plays. The Japanese yen is getting stronger than I would like, and an extreme in correlation between USD\/JPY (U.S. dollar to Japanese yen ratio) is flagging one warning (for more detail see &#8220;<a href=\"http:\/\/seekingalpha.com\/article\/484281-bearish-implications-of-a-rare-convergence-of-extremes-in-yen-vs-s-p-500-correlations\" target=\"_blank\">Bearish Implications Of A Rare Convergence Of Extremes In Yen Vs. S&#038;P 500 Correlations<\/a>&#8220;). Moreover, the Australian dollar&#8217;s weakness combined with a change in relative performance with the S&#038;P 500 is flagging another warning signal (for more see &#8220;<a href=\"http:\/\/seekingalpha.com\/article\/499071-positioning-more-bearishly-vs-the-australian-dollar-as-it-loses-2012s-gains#comments_header\" target=\"_blank\">Positioning More Bearishly Vs. The Australian Dollar As It Loses 2012\u2032s Gains<\/a>&#8220;). The currency market is keeping me on my toes, and I need to reserve a full post dedicated to my current thoughts and positioning. So note that my disclosure below does not represent a complete story&#8230;<\/p>\n<p><strong>Daily T2108 vs the S&#038;P 500<\/strong><br \/>\n<a href=\"http:\/\/www.drduru.com\/money\/charts\/T2108-daily_s.png\"><img loading=\"lazy\" decoding=\"async\" src=\"http:\/\/www.drduru.com\/money\/charts\/T2108-daily_s.png\" width=\"500\" height=\"350\" alt=\"T2108 vs. the S&#038;P 500 (DAILY)\" title=\"T2108 vs. the S&#038;P 500 (DAILY)\"><\/a><\/p>\n<p>Black line: T2108 (measured on the right); Green line: S&#038;P 500 (for comparative purposes)<br \/>\n<\/center><\/p>\n<p><center><br \/>\n<strong>Weekly T2108<\/strong><br \/>\n<a href=\"http:\/\/www.drduru.com\/money\/charts\/T2108-weekly_s.png\"><img loading=\"lazy\" decoding=\"async\" src=\"http:\/\/www.drduru.com\/money\/charts\/T2108-weekly_s.png\" width=\"500\" height=\"350\" alt=\"Weekly T2108\" title=\"Weekly T2108\"><br \/>\n*<strong>All charts created using <a href=\"http:\/\/www.freestockcharts.com\/\" title=\"Freestockcharts.com\" target=\"_blank\">freestockcharts.com<\/a><\/strong> unless otherwise stated<\/a><br \/>\n<\/center><\/p>\n<p><strong>Related links:<\/strong><br \/>\n<a href=\"http:\/\/www.drduru.com\/money\/T2108.htm\">The T2108 Resource Page<\/a><br \/>\n<a href=\"http:\/\/www.drduru.com\/money\/charts\/T2108-daily.jpg\">Expanded daily chart of T2108 versus the S&#038;P 500<\/a><br \/>\n<a href=\"http:\/\/www.drduru.com\/money\/charts\/T2108-weekly.jpg\">Expanded weekly chart of T2108 <\/a><\/p>\n<p>Be careful out there!<\/p>\n<p>Full disclosure: long SDS; long VXX puts; long CAT shares and puts; net long Australian dollar; roughly neutral Japanese yen<\/p>\n","protected":false},"excerpt":{"rendered":"<p>(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. You can follow real-time T2108 commentary on twitter using the #T2108 hashtag. T2108-related trades and other trades are posted on twitter using the #120trade hashtag) T2108 Status: 39% VIX Status: 17.4% &#8230; <a title=\"T2108 Update &#8211; April 20, 2012 (A Churning Week: Bulls Cling, Bears Hope)\" class=\"read-more\" href=\"https:\/\/drduru.com\/onetwentytwo\/2012\/04\/21\/t2108-update-120420\/\">Read more<\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[20,135,62],"tags":[310,138,65,226,1597,303,931,120],"class_list":["post-11139","post","type-post","status-publish","format-standard","hentry","category-forex","category-stock-market-trading","category-technical-analysis","tag-australian-dollar","tag-japanese-yen","tag-sp-500","tag-t2108","tag-technical-analysis","tag-vix","tag-volatility-index","tag-vxx"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.4 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>T2108 Update - April 20, 2012 (A Churning Week: Bulls Cling, Bears Hope) - ONE-TWENTY TWO: Trading Financial Markets<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/drduru.com\/onetwentytwo\/2012\/04\/21\/t2108-update-120420\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"T2108 Update - April 20, 2012 (A Churning Week: Bulls Cling, Bears Hope) - ONE-TWENTY TWO: Trading Financial Markets\" \/>\n<meta property=\"og:description\" content=\"(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. You can follow real-time T2108 commentary on twitter using the #T2108 hashtag. T2108-related trades and other trades are posted on twitter using the #120trade hashtag) T2108 Status: 39% VIX Status: 17.4% ... 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To learn more about it, see my T2108 Resource Page. You can follow real-time T2108 commentary on twitter using the #T2108 hashtag. T2108-related trades and other trades are posted on twitter using the #120trade hashtag) T2108 Status: 39% VIX Status: 17.4% ... 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