{"id":15506,"date":"2012-11-28T22:54:44","date_gmt":"2012-11-29T06:54:44","guid":{"rendered":"http:\/\/drduru.com\/onetwentytwo\/?p=15506"},"modified":"2012-11-29T23:10:06","modified_gmt":"2012-11-30T07:10:06","slug":"t2108-update-121128","status":"publish","type":"post","link":"https:\/\/drduru.com\/onetwentytwo\/2012\/11\/28\/t2108-update-121128\/","title":{"rendered":"T2108 Update (November 28, 2012) &#8211; Successful (And Dramatic) Retest of the 200-Day Moving Average"},"content":{"rendered":"<p>(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 <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>: 48.1%<br \/>\n<strong>VIX Status<\/strong>: 15.5<br \/>\n<strong>General (Short-term) Trading Call<\/strong>: Hold (Bullish bias remains)<\/p>\n<p><strong>Reference Charts<\/strong> (click for view of last 6 months from Stockcharts.com):<\/p>\n<p><a href=\"http:\/\/stockcharts.com\/h-sc\/ui?s=$SPX&#038;p=D&#038;st=2012-05-28&#038;en=2012-11-28&#038;id=p14085208538\" title=\"6-month chart of the S&#038;P 500\" target=\"_blank\">S&#038;P 500<\/a> or <a href=\"http:\/\/stockcharts.com\/h-sc\/ui?s=SPY&#038;p=D&#038;st=2012-05-28&#038;en=2012-11-28&#038;id=p14085208538\" title=\"6-month chart of SPY\" target=\"_blank\">SPY<\/a><br \/>\n<a href=\"http:\/\/stockcharts.com\/h-sc\/ui?s=SDS&#038;p=D&#038;st=2012-05-28&#038;en=2012-11-28&#038;id=p15880085697\" title=\"6-month chart of SDS\" target=\"_blank\">SDS<\/a> (ProShares UltraShort S&#038;P500)<br \/>\n<a href=\"http:\/\/stockcharts.com\/h-sc\/ui?s=$USD&#038;p=D&#038;st=2012-05-28&#038;en=2012-11-28&#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=2012-05-28&#038;en=2012-11-28&#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=2012-05-28&#038;en=2012-11-28&#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=2012-05-28&#038;en=2012-11-28&#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=2012-05-28&#038;en=2012-11-28&#038;id=p15880085697\" title=\"6-month chart of CAT\" target=\"_blank\">CAT<\/a> (Caterpillar)<\/p>\n<p><strong>Commentary<\/strong><br \/>\nThe oversold bounce continues as the S&#038;P 500 staged an impressive turn-around that transformed into a successful (and significant) retest of its 200DMA. T2108 surged another 9 percentage points to 48.1%, almost a new high for the month. While the close for the day was strong, the market opened weakly in ominous fashion.<\/p>\n<p>Shortly after 10am Eastern, the S&#038;P 500 (SPY) fell over a cliff and tumbled towards its 200-day moving average in just a few minutes time. Suddenly, <a href=\"http:\/\/news.yahoo.com\/boehner-pelsoi-agree-fiscal-deal-asap-172619362--abc-news-politics.html\" target=\"_blank\">headlines circulated that House Majority Leader John Boehner made statements indicating his party is ready to cut a deal with the President and Democrats to avert sending the economy over a Fiscal Cliff<\/a>. The stock market&#8217;s response printed an 180 degree turn-around.<\/p>\n<p><center><br \/>\n<figure id=\"attachment_15494\" aria-describedby=\"caption-attachment-15494\" style=\"width: 490px\" class=\"wp-caption aligncenter\"><a href=\"http:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2012\/11\/121128_SP500-intraday.png\"><img loading=\"lazy\" decoding=\"async\" src=\"http:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2012\/11\/121128_SP500-intraday.png\" alt=\"The S&amp;P 500 tumbles sharply shortly after the open but closes strong\" title=\"The S&amp;P 500 tumbles sharply shortly after the open but closes strong\" width=\"500\" height=\"350\" class=\"size-full wp-image-15494\" srcset=\"https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2012\/11\/121128_SP500-intraday.png 500w, https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2012\/11\/121128_SP500-intraday-300x210.png 300w\" sizes=\"auto, (max-width: 500px) 100vw, 500px\" \/><\/a><figcaption id=\"caption-attachment-15494\" class=\"wp-caption-text\">The S&P 500 tumbles sharply shortly after the open but closes strong<\/figcaption><\/figure><br \/>\n<br \/>\n<figure id=\"attachment_15495\" aria-describedby=\"caption-attachment-15495\" style=\"width: 490px\" class=\"wp-caption aligncenter\"><a href=\"http:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2012\/11\/121128_SP500.png\"><img loading=\"lazy\" decoding=\"async\" src=\"http:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2012\/11\/121128_SP500.png\" alt=\"The S&amp;P 500 successfully retests its 200DMA\" title=\"The S&amp;P 500 successfully retests its 200DMA\" width=\"500\" height=\"350\" class=\"size-full wp-image-15495\" srcset=\"https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2012\/11\/121128_SP500.png 500w, https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2012\/11\/121128_SP500-300x210.png 300w\" sizes=\"auto, (max-width: 500px) 100vw, 500px\" \/><\/a><figcaption id=\"caption-attachment-15495\" class=\"wp-caption-text\">The S&P 500 successfully retests its 200DMA<\/figcaption><\/figure><br \/>\n<\/center><\/p>\n<p>As I like to say, you just cannot make this stuff up. Sheer coincidence that the S&#038;P 500 retested the 200DMA around the time of Boehner&#8217;s statement? We will never know. But the timing was at least convenient. The bounce that confirmed the 200DMA support was strong but quite strong enough to pull the S&#038;P 500 away from the resistance it has battled since last week&#8217;s Black Friday rally. This resistance coincides with the closing high from May of this year.<\/p>\n<p>Today&#8217;s sharp swing was a reminder that Fiscal Cliff headlines can disrupt market trading at anytime in any direction. The previous day, <a href=\"http:\/\/news.yahoo.com\/senator-reid-says-little-progress-made-fiscal-cliff-200753958--business.html\" target=\"_blank\">proclamations from Senate Majority Leader Harry Reid<\/a> were blamed for sending the S&#038;P 500 to a poor close that set up the bearish open for Wednesday&#8217;s trading.<\/p>\n<p>The end result of two days of Fiscal Cliff headlines is a market that net-net has generated a lot of intraday excitement but gone nowhere, a great reminder of the frequent futility of headline-driven trading when quick trigger emotions are running high. The most important impact of the Boehner&#8217;s market save and 200DMA test is that <a href=\"http:\/\/seekingalpha.com\/article\/1026571-quantifying-the-significance-of-black-friday-trading\" target=\"_blank\">the bullish Black Friday trade I discussed earlier this week<\/a> remains intact. As a reminder, if the S&#038;P 500 CLOSES Thursday without erasing all of the gains from Black Friday&#8217;s impressive rally (6th strongest since 1950), the odds become exceptionally good the S&#038;P 500 can sustain gains for several more weeks and perhaps even months ahead. <\/p>\n<p>At its lows on Wednesday, the S&#038;P 500 had erased all of Black Friday&#8217;s gains, so anyone playing the bearish version of the Black Friday trade &#8211; most years, Black Friday&#8217;s gains are completely erased by Thursday&#8217;s close and often by Monday&#8217;s close &#8211; could have declared mission accomplished and cashed out short positions. Instead, the sharp rebound avoids the bearish lower close and keeps the bullish version of the trade alive for now.<\/p>\n<p>As the market trudges higher, the volatility index (VIX) continues to show little to no overall dread about the Fiscal Cliff. However, a BIG caveat is that to-date the VIX has also not spend much time down at current levels. <\/p>\n<p><center><br \/>\n<figure id=\"attachment_15499\" aria-describedby=\"caption-attachment-15499\" style=\"width: 490px\" class=\"wp-caption aligncenter\"><a href=\"http:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2012\/11\/121128_VIX.png\"><img loading=\"lazy\" decoding=\"async\" src=\"http:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2012\/11\/121128_VIX.png\" alt=\"Despite the presumed threat of the Fiscal Cliff, market participants appear unwilling to pay up for protection\" title=\"Despite the presumed threat of the Fiscal Cliff, market participants appear unwilling to pay up for protection\" width=\"500\" height=\"350\" class=\"size-full wp-image-15499\" srcset=\"https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2012\/11\/121128_VIX.png 500w, https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2012\/11\/121128_VIX-300x210.png 300w\" sizes=\"auto, (max-width: 500px) 100vw, 500px\" \/><\/a><figcaption id=\"caption-attachment-15499\" class=\"wp-caption-text\">Despite the presumed threat of the Fiscal Cliff, market participants appear unwilling to pay up for protection<\/figcaption><\/figure><br \/>\n<strong>Source for charts: <a href=\"http:\/\/www.freestockcharts.com\/\" target=\"_blank\">FreeStockCharts.com<\/a><\/strong><br \/>\n<\/center><\/p>\n<p>Combine a tame VIX with a T2108 on the rise and an S&#038;P 500 successfully retesting 200DMA support, all within the context of the Black Friday trade, suddenly the market looks a lot more bullish than I had expected at this point.<\/p>\n<p><strong>Daily T2108 vs the S&#038;P 500<\/strong><br \/>\n<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)\"><\/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 SSO calls, long VXX shares and puts<\/p>\n","protected":false},"excerpt":{"rendered":"<p>(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 &#8230; <a title=\"T2108 Update (November 28, 2012) &#8211; Successful (And Dramatic) Retest of the 200-Day Moving Average\" class=\"read-more\" href=\"https:\/\/drduru.com\/onetwentytwo\/2012\/11\/28\/t2108-update-121128\/\">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":[266,135,62],"tags":[1031,65,226,1597,303,178],"class_list":["post-15506","post","type-post","status-publish","format-standard","hentry","category-government","category-stock-market-trading","category-technical-analysis","tag-fiscal-policy","tag-sp-500","tag-t2108","tag-technical-analysis","tag-vix","tag-volatility"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.4 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>T2108 Update (November 28, 2012) - Successful (And Dramatic) Retest of the 200-Day Moving Average - 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\/11\/28\/t2108-update-121128\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"T2108 Update (November 28, 2012) - Successful (And Dramatic) Retest of the 200-Day Moving Average - 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]. 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 ... 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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","og_url":"https:\/\/drduru.com\/onetwentytwo\/2012\/11\/28\/t2108-update-121128\/","og_site_name":"ONE-TWENTY TWO: Trading Financial Markets","article_published_time":"2012-11-29T06:54:44+00:00","article_modified_time":"2012-11-30T07:10:06+00:00","og_image":[{"url":"http:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2012\/11\/121128_SP500-intraday.png","type":"","width":"","height":""}],"author":"Dr. Duru","twitter_card":"summary_large_image","twitter_creator":"@drduru","twitter_site":"@drduru","twitter_misc":{"Written by":"Dr. Duru","Est. reading time":"4 minutes"},"schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"Article","@id":"https:\/\/drduru.com\/onetwentytwo\/2012\/11\/28\/t2108-update-121128\/#article","isPartOf":{"@id":"https:\/\/drduru.com\/onetwentytwo\/2012\/11\/28\/t2108-update-121128\/"},"author":{"name":"Dr. Duru","@id":"https:\/\/drduru.com\/onetwentytwo\/#\/schema\/person\/d9569fde6c701b021a8d958f775be9a0"},"headline":"T2108 Update (November 28, 2012) &#8211; Successful (And Dramatic) Retest of the 200-Day Moving Average","datePublished":"2012-11-29T06:54:44+00:00","dateModified":"2012-11-30T07:10:06+00:00","mainEntityOfPage":{"@id":"https:\/\/drduru.com\/onetwentytwo\/2012\/11\/28\/t2108-update-121128\/"},"wordCount":791,"commentCount":0,"publisher":{"@id":"https:\/\/drduru.com\/onetwentytwo\/#\/schema\/person\/d9569fde6c701b021a8d958f775be9a0"},"image":{"@id":"https:\/\/drduru.com\/onetwentytwo\/2012\/11\/28\/t2108-update-121128\/#primaryimage"},"thumbnailUrl":"http:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2012\/11\/121128_SP500-intraday.png","keywords":["fiscal policy","S&amp;P 500","T2108","Technical Analysis","VIX","volatility"],"articleSection":["Government","Stock Market Trading","Technical Analysis"],"inLanguage":"en-US","potentialAction":[{"@type":"CommentAction","name":"Comment","target":["https:\/\/drduru.com\/onetwentytwo\/2012\/11\/28\/t2108-update-121128\/#respond"]}]},{"@type":"WebPage","@id":"https:\/\/drduru.com\/onetwentytwo\/2012\/11\/28\/t2108-update-121128\/","url":"https:\/\/drduru.com\/onetwentytwo\/2012\/11\/28\/t2108-update-121128\/","name":"T2108 Update (November 28, 2012) - Successful (And Dramatic) Retest of the 200-Day Moving Average - ONE-TWENTY TWO: Trading Financial Markets","isPartOf":{"@id":"https:\/\/drduru.com\/onetwentytwo\/#website"},"primaryImageOfPage":{"@id":"https:\/\/drduru.com\/onetwentytwo\/2012\/11\/28\/t2108-update-121128\/#primaryimage"},"image":{"@id":"https:\/\/drduru.com\/onetwentytwo\/2012\/11\/28\/t2108-update-121128\/#primaryimage"},"thumbnailUrl":"http:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2012\/11\/121128_SP500-intraday.png","datePublished":"2012-11-29T06:54:44+00:00","dateModified":"2012-11-30T07:10:06+00:00","breadcrumb":{"@id":"https:\/\/drduru.com\/onetwentytwo\/2012\/11\/28\/t2108-update-121128\/#breadcrumb"},"inLanguage":"en-US","potentialAction":[{"@type":"ReadAction","target":["https:\/\/drduru.com\/onetwentytwo\/2012\/11\/28\/t2108-update-121128\/"]}]},{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/drduru.com\/onetwentytwo\/2012\/11\/28\/t2108-update-121128\/#primaryimage","url":"http:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2012\/11\/121128_SP500-intraday.png","contentUrl":"http:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2012\/11\/121128_SP500-intraday.png"},{"@type":"BreadcrumbList","@id":"https:\/\/drduru.com\/onetwentytwo\/2012\/11\/28\/t2108-update-121128\/#breadcrumb","itemListElement":[{"@type":"ListItem","position":1,"name":"Home","item":"https:\/\/drduru.com\/onetwentytwo\/"},{"@type":"ListItem","position":2,"name":"T2108 Update (November 28, 2012) &#8211; 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