{"id":11864,"date":"2012-05-23T22:25:08","date_gmt":"2012-05-24T02:25:08","guid":{"rendered":"http:\/\/drduru.com\/onetwentytwo\/?p=11864"},"modified":"2012-05-23T22:25:08","modified_gmt":"2012-05-24T02:25:08","slug":"t2108-update-120523","status":"publish","type":"post","link":"https:\/\/drduru.com\/onetwentytwo\/2012\/05\/23\/t2108-update-120523\/","title":{"rendered":"T2108 Update (May 23, 2012) – Oversold Period Ends While Risks Remain High"},"content":{"rendered":"

(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<\/a>. You can follow real-time T2108 commentary<\/a> on twitter using the #T2108 hashtag. T2108-related trades and other trades are posted on twitter using the #120trade hashtag<\/a>)<\/p>\n

T2108 Status<\/strong>: 22.5% (Last oversold period ends at 4 days)
\nVIX Status<\/strong>: 22.3
\nGeneral (Short-term) Trading Call<\/strong>: Hold with a bullish bias (click here<\/a> for a trading summary posted on twitter)
\nReference Charts<\/strong> (click for view of last 6 months from Stockcharts.com):
\nS&P 500<\/a> or SPY<\/a>
\nSDS<\/a> (ProShares UltraShort S&P500)
\nU.S. Dollar Index<\/a> (volatility index)
\nVIX<\/a> (volatility index)
\nVXX<\/a> (iPath S&P 500 VIX Short-Term Futures ETN)
\nEWG<\/a> (iShares MSCI Germany Index Fund)
\nCAT<\/a> (Caterpillar)<\/p>\n

Commentary<\/strong>
\nFor the first half of the trading day, it appeared the S&P 500 would close with its fifth oversold day in a row. Instead, a strong rally in less than two hours reversed all the losses on the day, returning the index to its starting point. This performance was good enough to drag T2108 out of oversold territory. The four-day long oversold period is just below average. Here are the statistics I reviewed in last summer’s discussion of the rules for trading oversold periods<\/a>:<\/p>\n