{"id":15805,"date":"2012-12-13T02:02:10","date_gmt":"2012-12-13T10:02:10","guid":{"rendered":"http:\/\/drduru.com\/onetwentytwo\/?p=15805"},"modified":"2012-12-13T02:23:22","modified_gmt":"2012-12-13T10:23:22","slug":"t2108-update-121212","status":"publish","type":"post","link":"https:\/\/drduru.com\/onetwentytwo\/2012\/12\/13\/t2108-update-121212\/","title":{"rendered":"T2108 Update (December 12, 2012) &#8211; Perfect Resistance from QE3 Price; Chart Reviews for XLF, Siemens, Jinko Solar, Apple"},"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>: 62.7%<br \/>\n<strong>VIX Status<\/strong>: 16.0<br \/>\n<strong>General (Short-term) Trading Call<\/strong>: Hold (assuming most positions from oversold bounce are closed out)<\/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=$SPX&#038;p=D&#038;st=2012-06-12&#038;en=2012-12-12&#038;id=p14085208538\" title=\"6-month chart of the S&#038;P 500\" target=\"_blank\">S&#038;P 500<\/a> or <a href=\"http:\/\/stockcharts.com\/h-sc\/ui?s=SPY&#038;p=D&#038;st=2012-06-12&#038;en=2012-12-12&#038;id=p14085208538\" title=\"6-month chart of SPY\" target=\"_blank\">SPY<\/a><br \/>\n<a href=\"http:\/\/stockcharts.com\/h-sc\/ui?s=SDS&#038;p=D&#038;st=2012-06-12&#038;en=2012-12-12&#038;id=p15880085697\" title=\"6-month chart of SDS\" target=\"_blank\">SDS<\/a> (ProShares UltraShort S&#038;P500)<br \/>\n<a href=\"http:\/\/stockcharts.com\/h-sc\/ui?s=$USD&#038;p=D&#038;st=2012-06-12&#038;en=2012-12-12&#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=2012-06-12&#038;en=2012-12-12&#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=2012-06-12&#038;en=2012-12-12&#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=2012-06-12&#038;en=2012-12-12&#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=2012-06-12&#038;en=2012-12-12&#038;id=p15880085697\" title=\"6-month chart of CAT\" target=\"_blank\">CAT<\/a> (Caterpillar)<\/p>\n<p><strong>Commentary<\/strong><br \/>\nOn a day where the Federal Reserve upped the ante on its latest round of quantitative easing, it is poetically fitting that the S&#038;P 500 perfectly pulled back from resistance at its QE3 price (the closing price of the S&#038;P 500 the day before QE3 was announced). In yet another installment of &#8220;you can&#8217;t make this stuff up,&#8221; the S&#038;P 500 actually faded in picture-perfect style for the second day in a row. The previous day, Tuesday, the S&#038;P 500 also traded up to the QE3 price before fading back to&#8230;you guessed, its closing price on Election Day.<\/p>\n<p><center><br \/>\n<figure id=\"attachment_15806\" aria-describedby=\"caption-attachment-15806\" style=\"width: 490px\" class=\"wp-caption aligncenter\"><a href=\"http:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2012\/12\/121212_SP500.png\"><img loading=\"lazy\" decoding=\"async\" src=\"http:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2012\/12\/121212_SP500.png\" alt=\"The S&amp;P 500 fails to break resistance at the QE3 price two days in a row\" title=\"The S&amp;P 500 fails to break resistance at the QE3 price two days in a row\" width=\"500\" height=\"350\" class=\"size-full wp-image-15806\" srcset=\"https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2012\/12\/121212_SP500.png 500w, https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2012\/12\/121212_SP500-300x210.png 300w\" sizes=\"auto, (max-width: 500px) 100vw, 500px\" \/><\/a><figcaption id=\"caption-attachment-15806\" class=\"wp-caption-text\">The S&P 500 fails to break resistance at the QE3 price two days in a row<\/figcaption><\/figure><br \/>\n<\/center><\/p>\n<p>T2108 fell slightly to 62.7%. Given it closed at 64.3% the previous day, I strongly suspect that T2108 traded at overbought levels at the intraday high for the S&#038;P 500. This is not enough to trigger an official T2108 overbought trade, but it is sufficient to get cautious in the context of the S&#038;P 500 failing to overcome important resistance. Until T2108 hits official overbought levels, aggressive shorts do not make sense unless the S&#038;P 500 closes below its 50DMA. Even so, make no mistake, the index still has a bullish bias. For example, <a href=\"http:\/\/seekingalpha.com\/article\/1040081-black-friday-trade-gets-more-bullish-even-as-fiscal-cliff-looms\" target=\"_blank\">the bullish post-Black Friday trade<\/a> is still in effect. After the &#8220;fade the Fed&#8221; selling exhausts itself, buyers may rush right back into the market trying to ride the coattails of money-printing liquidity. Net-net, we have a great recipe for a lot of churning for the last trading weeks of the year.<\/p>\n<p>The SPDRs Select Sector Financial ETF (XLF) is a great reminder of the stock market&#8217;s bullish bias. XLF&#8217;s bounce from the June lows continues as the 200DMA held up as support during last month&#8217;s post-election selling. At Wednesday&#8217;s high, XLF was challenging its 52-week closing high.<\/p>\n<p><center><br \/>\n<figure id=\"attachment_15808\" aria-describedby=\"caption-attachment-15808\" style=\"width: 490px\" class=\"wp-caption aligncenter\"><a href=\"http:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2012\/12\/121212_XLF.png\"><img loading=\"lazy\" decoding=\"async\" src=\"http:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2012\/12\/121212_XLF.png\" alt=\"XLF remains in an upward, bullish trend\" title=\"XLF remains in an upward, bullish trend\" width=\"500\" height=\"350\" class=\"size-full wp-image-15808\" srcset=\"https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2012\/12\/121212_XLF.png 500w, https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2012\/12\/121212_XLF-300x210.png 300w\" sizes=\"auto, (max-width: 500px) 100vw, 500px\" \/><\/a><figcaption id=\"caption-attachment-15808\" class=\"wp-caption-text\">XLF remains in an upward, bullish trend<\/figcaption><\/figure><br \/>\n<\/center><\/p>\n<p>In the past few posts, I have pointed out the breakout potential in Siemens Atkins (SI) and Jinko Solar (JKS). Both have delivered since then, especially JKS which gained 19.5% on the day. I think the charts speak volumes.<\/p>\n<p><center><br \/>\n<figure id=\"attachment_15809\" aria-describedby=\"caption-attachment-15809\" style=\"width: 490px\" class=\"wp-caption aligncenter\"><a href=\"http:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2012\/12\/121212_SI.png\"><img loading=\"lazy\" decoding=\"async\" src=\"http:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2012\/12\/121212_SI.png\" alt=\"Siemens breaks out\" title=\"Siemens breaks out\" width=\"500\" height=\"350\" class=\"size-full wp-image-15809\" srcset=\"https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2012\/12\/121212_SI.png 500w, https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2012\/12\/121212_SI-300x210.png 300w\" sizes=\"auto, (max-width: 500px) 100vw, 500px\" \/><\/a><figcaption id=\"caption-attachment-15809\" class=\"wp-caption-text\">Siemens breaks out<\/figcaption><\/figure><br \/>\n<br \/>\n<figure id=\"attachment_15810\" aria-describedby=\"caption-attachment-15810\" style=\"width: 490px\" class=\"wp-caption aligncenter\"><a href=\"http:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2012\/12\/121212_JKS.png\"><img loading=\"lazy\" decoding=\"async\" src=\"http:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2012\/12\/121212_JKS.png\" alt=\"Jinko Solar follows through on its breakout in rip-roaring fashion\" title=\"Jinko Solar follows through on its breakout in rip-roaring fashion\" width=\"500\" height=\"350\" class=\"size-full wp-image-15810\" srcset=\"https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2012\/12\/121212_JKS.png 500w, https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2012\/12\/121212_JKS-300x210.png 300w\" sizes=\"auto, (max-width: 500px) 100vw, 500px\" \/><\/a><figcaption id=\"caption-attachment-15810\" class=\"wp-caption-text\">Jinko Solar follows through on its breakout in rip-roaring fashion<\/figcaption><\/figure><br \/>\n<\/center><\/p>\n<p>(See <a href=\"http:\/\/www.bloomberg.com\/news\/2012-12-12\/solar-surges-on-reports-china-advances-rescue-with-subsidies.html\" target=\"_blank\">Bloomberg article on China&#8217;s increased solar subsidies<\/a> if you want some fundamental rationale behind the big move in JKS and other Chinese solar stocks).<\/p>\n<p>Despite Apple&#8217;s great year overall, it continue to miss out on these increasing pockets of bullishness.<\/p>\n<p>The chart below shows Apple is struggling to hold onto support. As I mentioned in a previous T2108 Update, such a rapid retest of support rarely ends well (that is anecdotal). The stock has essentially gone nowhere in 5 trading days in what I am calling on twitter &#8220;churn and burn.&#8221; This churn and burn has Apple swinging wildly, sucking in traders to follow the momentum, only to burn traders who overplay the move. This is a perfect environment for options sellers to rake in massive amounts of premiums. On an intraday basis, the moves seem dramatic, but pull back a bit and you see the stock is actually going nowhere. Eventually, a fresh sustained move will erupt, but it is hard to tell exactly when or how.<\/p>\n<p>This churn and burn is my motivation behind trading in multiple call and put spreads at different expirations. The difficult element of the trade is knowing when it makes sense to close out the short side of the spread to maximize exposure to the next sustained move. Given expiration of the weeklies is just two days away, I have closed the short sides of the spreads coming up for expiry. Given the churn, I will be locking in any profits relatively quickly.<\/p>\n<p><center><br \/>\n<figure id=\"attachment_15811\" aria-describedby=\"caption-attachment-15811\" style=\"width: 490px\" class=\"wp-caption aligncenter\"><a href=\"http:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2012\/12\/121212_AAPL.png\"><img loading=\"lazy\" decoding=\"async\" src=\"http:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2012\/12\/121212_AAPL.png\" alt=\"Apple&#039;s churn and burn causes a lot of intraday excitement but little progress on a  daily basis.\" title=\"Apple&#039;s churn and burn causes a lot of intraday excitement but little progress on a  daily basis.\" width=\"500\" height=\"350\" class=\"size-full wp-image-15811\" srcset=\"https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2012\/12\/121212_AAPL.png 500w, https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2012\/12\/121212_AAPL-300x210.png 300w\" sizes=\"auto, (max-width: 500px) 100vw, 500px\" \/><\/a><figcaption id=\"caption-attachment-15811\" class=\"wp-caption-text\">Apple&#039;s churn and burn causes a lot of intraday excitement but little progress on a  daily basis.<\/figcaption><\/figure><br \/>\n<\/center><\/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 FCX; long AAPL shares, call and put spreads; long JKS<\/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 (December 12, 2012) &#8211; Perfect Resistance from QE3 Price; Chart Reviews for XLF, Siemens, Jinko Solar, Apple\" class=\"read-more\" href=\"https:\/\/drduru.com\/onetwentytwo\/2012\/12\/13\/t2108-update-121212\/\">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":[482,548,219,43,3,511,62],"tags":[250,534,425,426,65,577,576,734,226,1597,311],"class_list":["post-15805","post","type-post","status-publish","format-standard","hentry","category-breakout","category-financials","category-high-tech","category-industrial-sector","category-solar-energy","category-support","category-technical-analysis","tag-aapl","tag-apple-inc","tag-jinko-solar","tag-jks","tag-sp-500","tag-si","tag-siemens-aktien","tag-spdrs-select-sector-financial-etf","tag-t2108","tag-technical-analysis","tag-xlf"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.4 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>T2108 Update (December 12, 2012) - Perfect Resistance from QE3 Price; Chart Reviews for XLF, Siemens, Jinko Solar, Apple - 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\/12\/13\/t2108-update-121212\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"T2108 Update (December 12, 2012) - Perfect Resistance from QE3 Price; Chart Reviews for XLF, Siemens, Jinko Solar, Apple - 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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