{"id":13052,"date":"2012-07-26T21:56:14","date_gmt":"2012-07-27T01:56:14","guid":{"rendered":"http:\/\/drduru.com\/onetwentytwo\/?p=13052"},"modified":"2012-07-26T22:02:14","modified_gmt":"2012-07-27T02:02:14","slug":"t2108-update-120726","status":"publish","type":"post","link":"https:\/\/drduru.com\/onetwentytwo\/2012\/07\/26\/t2108-update-120726\/","title":{"rendered":"T2108 Update (July 26, 2012) &#8211; A Bounce&#8230;.Again"},"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>: 62.5%<br \/>\n<strong>VIX Status<\/strong>: 17.5 (confirmed rejection from 50DMA and point of breakout for summer 2011 swoon)<br \/>\n<strong>General (Short-term) Trading Call<\/strong>: Hold<\/p>\n<p><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=$SPX&#038;p=D&#038;st=2012-01-26&#038;en=2012-07-26&#038;id=p14085208538\" title=\"6-month chart of the S&#038;P 500\" target=\"_blank\">S&#038;P 500<\/a> or <a href=\"http:\/\/stockcharts.com\/h-sc\/ui?s=SPY&#038;p=D&#038;st=2012-01-26&#038;en=2012-07-26&#038;id=p14085208538\" title=\"6-month chart of SPY\" target=\"_blank\">SPY<\/a><br \/>\n<a href=\"http:\/\/stockcharts.com\/h-sc\/ui?s=SDS&#038;p=D&#038;st=2012-01-26&#038;en=2012-07-26&#038;id=p15880085697\" title=\"6-month chart of SDS\" target=\"_blank\">SDS<\/a> (ProShares UltraShort S&#038;P500)<br \/>\n<a href=\"http:\/\/stockcharts.com\/h-sc\/ui?s=$USD&#038;p=D&#038;st=2012-01-26&#038;en=2012-07-26&#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=2012-01-26&#038;en=2012-07-26&#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=2012-01-26&#038;en=2012-07-26&#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=2012-01-26&#038;en=2012-07-26&#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=2012-01-26&#038;en=2012-07-26&#038;id=p15880085697\" title=\"6-month chart of CAT\" target=\"_blank\">CAT<\/a> (Caterpillar)<\/p>\n<p><strong>Commentary<\/strong><br \/>\nToday was a great reminder of why I am extremely reluctant to hold T2108 bearish positions for more than a day or two. The markets seemed set for a sleepy open until <a href=\"http:\/\/www.bloomberg.com\/news\/2012-07-26\/draghi-says-ecb-to-do-whatever-needed-as-yields-threaten-europe.html\" target=\"_blank\">European Central Bank President Mario Draghi jawboned the markets in the classic style of a central banker<\/a>: &#8220;&#8216;Within our mandate, the ECB is ready to do whatever it takes to preserve the euro&#8230;believe me, it will be enough&#8217;&#8230;markets have underestimated the progress that\u2019s been made in the euro area and that the monetary union is &#8216;irreversible.'&#8221; With that it was off to the races. The euro soared against the dollar and the dollar index was soundly rejected from its QE2 reference price (right after <a href=\"http:\/\/seekingalpha.com\/article\/750921-by-closing-above-its-qe2-reference-price-dollar-increases-pressure-on-fed\" target=\"_blank\">I just finished announcing the jump ABOVE that milestone<\/a>!).<\/p>\n<p><center><br \/>\n<figure id=\"attachment_13053\" aria-describedby=\"caption-attachment-13053\" style=\"width: 490px\" class=\"wp-caption aligncenter\"><a href=\"http:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2012\/07\/120726_DXY0.png\"><img loading=\"lazy\" decoding=\"async\" src=\"http:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2012\/07\/120726_DXY0.png\" alt=\"The U.S. dollar tumbles from its QE2 reference price\" title=\"The U.S. dollar tumbles from its QE2 reference price\" width=\"500\" height=\"350\" class=\"size-full wp-image-13053\" srcset=\"https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2012\/07\/120726_DXY0.png 500w, https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2012\/07\/120726_DXY0-300x210.png 300w\" sizes=\"auto, (max-width: 500px) 100vw, 500px\" \/><\/a><figcaption id=\"caption-attachment-13053\" class=\"wp-caption-text\">The U.S. dollar tumbles from its QE2 reference price<\/figcaption><\/figure><br \/>\n<\/center><\/p>\n<p>It was fascinating to see the S&#038;P 500 soar 1.7% on positive news from euroland when it has performed exceptionally well even as the euro slowly but surely dripped lower. I did not attempt to fade the rally given the index had not yet run into major resistance. It is usually futile to fade a rally that is freshly bouncing off firm support like the 50DMA. Moreover, T2108 is not yet overbought (now at 62.6%).<\/p>\n<p><center><br \/>\n<figure id=\"attachment_13054\" aria-describedby=\"caption-attachment-13054\" style=\"width: 490px\" class=\"wp-caption aligncenter\"><a href=\"http:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2012\/07\/120726_SP500.png\"><img loading=\"lazy\" decoding=\"async\" src=\"http:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2012\/07\/120726_SP500.png\" alt=\"The S&amp;P 500 bounces off support yet again - the good ol&#039; 50DMA\" title=\"The S&amp;P 500 bounces off support yet again - the good ol&#039; 50DMA\" width=\"500\" height=\"350\" class=\"size-full wp-image-13054\" srcset=\"https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2012\/07\/120726_SP500.png 500w, https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2012\/07\/120726_SP500-300x210.png 300w\" sizes=\"auto, (max-width: 500px) 100vw, 500px\" \/><\/a><figcaption id=\"caption-attachment-13054\" class=\"wp-caption-text\">The S&P 500 bounces off support yet again - the good ol&#039; 50DMA<\/figcaption><\/figure><br \/>\n<\/center><\/p>\n<p>The VIX dropped 9.4% in a move that confirms another rejection from 50DMA resistance and the line that defines the breakout point for 2011&#8217;s summer swoon. This dance has been unfolding nearly all year, and I am surprised this churn continues with no real resolution.<\/p>\n<p>One of my disappointments on the day came from Siemens Atkins (SI) which strangely refused to participate in the day&#8217;s festivities. I purchased this contrary play specifically to profit from a day like today. SI &#8220;should have&#8221; bounced 3-5%. Caterpillar, Inc. (CAT) also failed to participate as it continues to perform the role of a canary in the coal mine. CAT responded poorly to earnings yesterday by completely fading its gap up. The stock faded again today from a small gap up and struggled to achieve its under-performing 0.9% gain. The 50DMA continues to cap CAT and drive it ever downward. The stock remains almost 10% down for the year.<\/p>\n<p><strong>Daily T2108 vs the S&#038;P 500<\/strong><br \/>\nClick chart for extended view with S&#038;P 500 fully scaled vertically (updated at least once a week)<br \/>\n<a href=\"http:\/\/www.drduru.com\/money\/charts\/T2108-daily_extended.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 shares; short VXX call spreads; long VXX puts; long CAT, SI; net short euro<\/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: 62.5% VIX Status: 17.5 &#8230; <a title=\"T2108 Update (July 26, 2012) &#8211; A Bounce&#8230;.Again\" class=\"read-more\" href=\"https:\/\/drduru.com\/onetwentytwo\/2012\/07\/26\/t2108-update-120726\/\">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":[43,135,511,62],"tags":[64,63,65,577,576,226,1597,303,931],"class_list":["post-13052","post","type-post","status-publish","format-standard","hentry","category-industrial-sector","category-stock-market-trading","category-support","category-technical-analysis","tag-cat","tag-caterpillar-inc","tag-sp-500","tag-si","tag-siemens-aktien","tag-t2108","tag-technical-analysis","tag-vix","tag-volatility-index"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.4 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>T2108 Update (July 26, 2012) - A Bounce....Again - 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\/07\/26\/t2108-update-120726\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"T2108 Update (July 26, 2012) - A Bounce....Again - 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]. 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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: 62.5% VIX Status: 17.5 ... 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