{"id":18186,"date":"2013-06-03T18:01:12","date_gmt":"2013-06-04T01:01:12","guid":{"rendered":"http:\/\/drduru.com\/onetwentytwo\/?p=18186"},"modified":"2013-06-03T18:01:12","modified_gmt":"2013-06-04T01:01:12","slug":"t2108-update-130603","status":"publish","type":"post","link":"https:\/\/drduru.com\/onetwentytwo\/2013\/06\/03\/t2108-update-130603\/","title":{"rendered":"T2108 Update (June 3, 2013) &#8211; Well-Timed Bounce"},"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>: 45.6% (quasi-oversold marginally)<br \/>\n<strong>VIX Status<\/strong>: 16.3 (flat after STRONG fade)<br \/>\n<strong>General (Short-term) Trading Call<\/strong>: Close shorts for now. Next short-term opportunity: breakdown below bear\/bull dividing line and\/or on retest of short-term downtrend line<br \/>\n<strong>Active T2108 periods<\/strong>: Day #31 of over 40% (overperiod), Day #2 under 50% (underperiod), Day #8 under 70% (underperiod)<\/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=$SPX&#038;p=D&#038;st=2012-12-03&#038;en=2013-06-03&#038;id=p14085208538\" title=\"6-month chart of the S&#038;P 500\" target=\"_blank\">S&#038;P 500<\/a> or <a href=\"http:\/\/stockcharts.com\/h-sc\/ui?s=SPY&#038;p=D&#038;st=2012-12-03&#038;en=2013-06-03&#038;id=p14085208538\" title=\"6-month chart of SPY\" target=\"_blank\">SPY<\/a><br \/>\n<a href=\"http:\/\/stockcharts.com\/h-sc\/ui?s=SDS&#038;p=D&#038;st=2012-12-03&#038;en=2013-06-03&#038;id=p15880085697\" title=\"6-month chart of SDS\" target=\"_blank\">SDS<\/a> (ProShares UltraShort S&#038;P500)<br \/>\n<a href=\"http:\/\/stockcharts.com\/h-sc\/ui?s=$USD&#038;p=D&#038;st=2012-12-03&#038;en=2013-06-03&#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=2012-12-03&#038;en=2013-06-03&#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=2012-12-03&#038;en=2013-06-03&#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=2012-12-03&#038;en=2013-06-03&#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=2012-12-03&#038;en=2013-06-03&#038;id=p15880085697\" title=\"6-month chart of CAT\" target=\"_blank\">CAT<\/a> (Caterpillar)<\/p>\n<p><strong>Commentary<\/strong><br \/>\nThe strong tendency for a rally to begin a new month won out today after a tough technical battle. (<a href=\"http:\/\/drduru.com\/onetwentytwo\/2013\/06\/01\/t2108-update-130531\/\" target=\"_blank\">See Friday&#8217;s update<\/a> for details on the various clashing technical signals going into today&#8217;s trading). The S&#038;P 500 (SPY) dropped exactly to the bear\/bull dividing line before turning around to finish UP for the day.<\/p>\n<p><center><br \/>\n<figure id=\"attachment_18188\" aria-describedby=\"caption-attachment-18188\" style=\"width: 490px\" class=\"wp-caption aligncenter\"><a href=\"http:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2013\/06\/130603_SP500.png\"><img loading=\"lazy\" decoding=\"async\" src=\"http:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2013\/06\/130603_SP500.png\" alt=\"A well-timed bounce by the S&amp;P 500\" width=\"500\" height=\"350\" class=\"size-full wp-image-18188\" srcset=\"https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2013\/06\/130603_SP500.png 500w, https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2013\/06\/130603_SP500-300x210.png 300w\" sizes=\"auto, (max-width: 500px) 100vw, 500px\" \/><\/a><figcaption id=\"caption-attachment-18188\" class=\"wp-caption-text\">A well-timed bounce by the S&#038;P 500<\/figcaption><\/figure><br \/>\n<\/center><\/p>\n<p>Only the intraday view of T2108 and the VIX gave hints to the dramatic turn-around from bearish gloom to hopeful buying. <\/p>\n<p><center><br \/>\n<figure id=\"attachment_18189\" aria-describedby=\"caption-attachment-18189\" style=\"width: 490px\" class=\"wp-caption aligncenter\"><a href=\"http:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2013\/06\/130603_T2108.png\"><img loading=\"lazy\" decoding=\"async\" src=\"http:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2013\/06\/130603_T2108.png\" alt=\"T2108 recovers sharply but remained down for the day\" width=\"500\" height=\"350\" class=\"size-full wp-image-18189\" srcset=\"https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2013\/06\/130603_T2108.png 500w, https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2013\/06\/130603_T2108-300x210.png 300w\" sizes=\"auto, (max-width: 500px) 100vw, 500px\" \/><\/a><figcaption id=\"caption-attachment-18189\" class=\"wp-caption-text\">T2108 recovers sharply but remained down for the day<\/figcaption><\/figure><br \/>\n<br \/>\n<figure id=\"attachment_18192\" aria-describedby=\"caption-attachment-18192\" style=\"width: 490px\" class=\"wp-caption aligncenter\"><a href=\"http:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2013\/06\/130603_VIX.png\"><img loading=\"lazy\" decoding=\"async\" src=\"http:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2013\/06\/130603_VIX.png\" alt=\"The VIX soared initially only to fade hard into the close\" width=\"500\" height=\"350\" class=\"size-full wp-image-18192\" srcset=\"https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2013\/06\/130603_VIX.png 500w, https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2013\/06\/130603_VIX-300x210.png 300w\" sizes=\"auto, (max-width: 500px) 100vw, 500px\" \/><\/a><figcaption id=\"caption-attachment-18192\" class=\"wp-caption-text\">The VIX soared initially only to fade hard into the close<\/figcaption><\/figure><br \/>\n<\/center><\/p>\n<p>T2108 dropped as low as 41.7% before recovering sharply. With the S&#038;P 500 testing key support and T2108 hitting a deeply quasi-oversold condition (2 straight down days for T2108), I ran the T2108 Trading Model (TTM) to get a projection for tomorrow&#8217;s (Tuesday, June 4) one-day performance. As I suspected, TTM projected very high odds of a bounce (81%). I tweeted the results and announced the closing of ALL my SSO puts. This extremely successful trade was yet another example of the power of the overhauled T2108 Model <strong>combined with<\/strong> the availability of intraday data for T2108. Almost on cue, the S&#038;P 500 rose from support, T2108 started its recovery, and suddenly, what should have been tomorrow&#8217;s bounce seems to have occurred today!<\/p>\n<p>With the S&#038;P 500 bounce in place, T2108 still remains quasi-oversold but only marginally. The TTM NOW projects a 63% chance of a DECLINE tomorrow. Recall that the TTM is much more reliable with up than down predictions. Nevertheless, it is consistent with an apparent bearish divergence between the S&#038;P 500 and T2108. This projection is also consistent with the likely cap provided by the short-term downtrend drawn from the all-time highs for the S&#038;P 500.<\/p>\n<p>There are now NO bullish trade triggers until some kind of oversold condition occurs (hopefully around the 50DMA). Until then, a retest of the short-term downtrend line and\/or a break of the bear\/bull dividing line trigger bearish trades. I will be much more aggressive with SSO puts on fades than chasing downward momentum.<\/p>\n<p><center><br \/>\n<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 \/>\nRed line: T2108 Overbought (70%); Blue line: T2108 Oversold (20%)<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: no positions<\/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 (June 3, 2013) &#8211; Well-Timed Bounce\" class=\"read-more\" href=\"https:\/\/drduru.com\/onetwentytwo\/2013\/06\/03\/t2108-update-130603\/\">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":[921,135,511,1154,62],"tags":[480,65,446,226,1597,303,931],"class_list":["post-18186","post","type-post","status-publish","format-standard","hentry","category-downtrend","category-stock-market-trading","category-support","category-t2108-model","category-technical-analysis","tag-pro-shares-ultra-sp-500","tag-sp-500","tag-sso","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 (June 3, 2013) - Well-Timed 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\/2013\/06\/03\/t2108-update-130603\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"T2108 Update (June 3, 2013) - Well-Timed 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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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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