{"id":14779,"date":"2012-10-16T00:30:10","date_gmt":"2012-10-16T07:30:10","guid":{"rendered":"http:\/\/drduru.com\/onetwentytwo\/?p=14779"},"modified":"2012-10-16T00:30:10","modified_gmt":"2012-10-16T07:30:10","slug":"t2108-update-121015","status":"publish","type":"post","link":"https:\/\/drduru.com\/onetwentytwo\/2012\/10\/16\/t2108-update-121015\/","title":{"rendered":"T2108 Update (October 15, 2012) – Obligatory Bounce"},"content":{"rendered":"

(T2108 measures the percentage of stocks trading above their respective 40-day moving averages [DMAs]. It helps to identify extremes in market sentiment that are highly likely to reverse. 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>: 55.4%
\nVIX Status<\/strong>: 15.2
\nGeneral (Short-term) Trading Call<\/strong>: Hold<\/p>\n

Reference Charts<\/strong> (click for view of last 6 months from Stockcharts.com):<\/p>\n

S&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>
\nAs I always say, you just can’t make this stuff up. The S&P 500 bounced perfectly off its 50DMA for what I call an “obligatory bounce.” The market’s movements are in such slow motion that it was relatively easy for technical traders to move the index off natural support. <\/p>\n


\n
\"The<\/a>
The S&P 500 bounces perfectly off the 50DMA and even closes above its QE3 price<\/figcaption><\/figure>
\n<\/center><\/p>\n

The bears may have just lost their best chance to knock the market down. As I type, the U.S. dollar is weakening with even the Australian dollar rallying despite what looks like the Reserve Bank of Australia’s promise to continue lowering interest rates<\/a>. Combine that with Asian stock markets opening strong and plenty of fuel is built up for a strong open on the U.S. markets. Given the double-top and the mild downtrend in place, it is also too soon to rekindle a bullish twinkle in the eye, but I always take note when one side or the other loses a golden opportunity to prove its point. Now, it is the turn of the bulls.<\/p>\n

T2108 bounced to 55.4%. It is not yet in a position to tell us much except that a lot of stocks have recently broken down from nice support levels.<\/p>\n

Given it is earnings season, I will try to keep these updates short since some announcement somewhere can immediately turn the technical picture on its head.<\/p>\n

I conclude with an “obligatory” chart of Apple (AAPL). The bears tried to break the stock as AAPL printed relative under-performance compared to the S&P 500. However, the sellers could not follow through. AAPL held at 2-month lows and even rallied directly into what is now key resistance around $636. If AAPL manages to close above this level, then I think it trades to $660 relatively quickly as long as the general market remains in a good mood. Remember that earnings are next week, October 25th; hedge funds and the like are now jockeying for position….<\/p>\n


\n
\"Bears<\/a>
Bears fail to break Apple as it holds onto 2-month lows<\/figcaption><\/figure>
\n<\/center><\/p>\n

Daily T2108 vs the S&P 500<\/strong>
\n\"T2108<\/p>\n

Black line: T2108 (measured on the right); Green line: S&P 500 (for comparative purposes)
\n<\/center><\/p>\n


\nWeekly T2108<\/strong>
\n\"Weekly
\n*All charts created using freestockcharts.com<\/a><\/strong> unless otherwise stated<\/a>
\n<\/center><\/p>\n

Related links:<\/strong>
\nThe T2108 Resource Page<\/a>
\nExpanded daily chart of T2108 versus the S&P 500<\/a>
\nExpanded weekly chart of T2108 <\/a><\/p>\n

Be careful out there!<\/p>\n

Full disclosure: no positions!<\/p>\n","protected":false},"excerpt":{"rendered":"

(T2108 measures the percentage of stocks trading above their respective 40-day moving averages [DMAs]. It helps to identify extremes in market sentiment that are highly likely to reverse. 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 … 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":[135,511,62],"tags":[250,534,65,226,1597],"class_list":["post-14779","post","type-post","status-publish","format-standard","hentry","category-stock-market-trading","category-support","category-technical-analysis","tag-aapl","tag-apple-inc","tag-sp-500","tag-t2108","tag-technical-analysis"],"yoast_head":"\nT2108 Update (October 15, 2012) - Obligatory Bounce - 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\/10\/16\/t2108-update-121015\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"T2108 Update (October 15, 2012) - Obligatory Bounce - 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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