{"id":19496,"date":"2013-08-24T12:56:05","date_gmt":"2013-08-24T19:56:05","guid":{"rendered":"http:\/\/drduru.com\/onetwentytwo\/?p=19496"},"modified":"2013-08-24T12:56:05","modified_gmt":"2013-08-24T19:56:05","slug":"t2108-update-130823","status":"publish","type":"post","link":"https:\/\/drduru.com\/onetwentytwo\/2013\/08\/24\/t2108-update-130823\/","title":{"rendered":"T2108 Update (August 23, 2013) &#8211; Quasi-Oversold Bounce Underway"},"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 gap down 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>: 38.7%<br \/>\n<strong>VIX Status<\/strong>: 14.0 (breakdown creating a false breakout)<br \/>\n<strong>General (Short-term) Trading Call<\/strong>: Hold. Aggressive traders can play move above 50DMA.<br \/>\n<strong>Active T2108 periods<\/strong>: Day #42 over 20% (overperiod), Day #6 under 40% (underperiod), Day #66 under 70%<\/p>\n<p><strong>Reference Charts<\/strong> (click for view of last 6 months from Stockcharts.com):<br \/>\n<a title=\"6-month chart of the S&amp;P 500\" href=\"http:\/\/stockcharts.com\/h-sc\/ui?s=$SPX&amp;p=D&amp;st=2013-02-23&amp;en=2013-08-23&amp;id=p14085208538\" target=\"_blank\">S&amp;P 500<\/a> or <a title=\"6-month chart of SPY\" href=\"http:\/\/stockcharts.com\/h-sc\/ui?s=SPY&amp;p=D&amp;st=2013-02-23&amp;en=2013-08-23&amp;id=p14085208538\" target=\"_blank\">SPY<\/a><br \/>\n<a title=\"6-month chart of SDS\" href=\"http:\/\/stockcharts.com\/h-sc\/ui?s=SDS&amp;p=D&amp;st=2013-02-23&amp;en=2013-08-23&amp;id=p15880085697\" target=\"_blank\">SDS<\/a> (ProShares UltraShort S&amp;P500)<br \/>\n<a title=\"6-month chart of the U.S. dollar\" href=\"http:\/\/stockcharts.com\/h-sc\/ui?s=$USD&amp;p=D&amp;st=2013-02-23&amp;en=2013-08-23&amp;id=p25615696567\" target=\"_blank\">U.S. Dollar Index<\/a> (volatility index)<br \/>\n<a title=\"6-month chart of the VIX\" href=\"http:\/\/stockcharts.com\/h-sc\/ui?s=$VIX&amp;p=D&amp;st=2013-02-23&amp;en=2013-08-23&amp;id=p25615696567\" target=\"_blank\">VIX<\/a> (volatility index)<br \/>\n<a title=\"6-month chart of VXX\" href=\"http:\/\/stockcharts.com\/h-sc\/ui?s=VXX&amp;p=D&amp;st=2013-02-23&amp;en=2013-08-23&amp;id=p15880085697\" target=\"_blank\">VXX<\/a> (iPath S&amp;P 500 VIX Short-Term Futures ETN)<br \/>\n<a title=\"6-month chart of EWG\" href=\"http:\/\/stockcharts.com\/h-sc\/ui?s=EWG&amp;p=D&amp;st=2013-02-23&amp;en=2013-08-23&amp;id=p15880085697\" target=\"_blank\">EWG<\/a> (iShares MSCI Germany Index Fund)<br \/>\n<a title=\"6-month chart of CAT\" href=\"http:\/\/stockcharts.com\/h-sc\/ui?s=CAT&amp;p=D&amp;st=2013-02-23&amp;en=2013-08-23&amp;id=p15880085697\" target=\"_blank\">CAT<\/a> (Caterpillar)<\/p>\n<p><strong>Commentary<\/strong><br \/>\nIt is starting to look like 30% will once again serve as a bottom for T2108. As I mentioned in <a href=\"http:\/\/drduru.com\/onetwentytwo\/2013\/08\/21\/t2108-update-130821\/\" target=\"_blank\">the last T2108 Update<\/a>, I purposely ignored the apparent dangers of last week&#8217;s 50DMA breakdown in favor of playing the odds for a bounce from quasi-oversold conditions. Now, the S&#038;P 500 (SPY) has crept above the 50DMA, making last week&#8217;s break look like another potential fake-out.<\/p>\n<p><center><br \/>\n<figure id=\"attachment_19498\" aria-describedby=\"caption-attachment-19498\" style=\"width: 490px\" class=\"wp-caption aligncenter\"><a href=\"http:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2013\/08\/130823_SP500.png\"><img loading=\"lazy\" decoding=\"async\" src=\"http:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2013\/08\/130823_SP500.png\" alt=\"S&amp;P 500 pushes above its 50DMA again\" width=\"500\" height=\"350\" class=\"size-full wp-image-19498\" srcset=\"https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2013\/08\/130823_SP500.png 500w, https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2013\/08\/130823_SP500-300x210.png 300w\" sizes=\"auto, (max-width: 500px) 100vw, 500px\" \/><\/a><figcaption id=\"caption-attachment-19498\" class=\"wp-caption-text\">S&#038;P 500 pushes above its 50DMA again<\/figcaption><\/figure><br \/>\n<\/center><\/p>\n<p>While the S&#038;P 500 looks like a potential fake-out on the breakdown side, the volatility index, the VIX, is looking like a potential fake-out on the breakout side. <\/p>\n<p><center><br \/>\n<figure id=\"attachment_19499\" aria-describedby=\"caption-attachment-19499\" style=\"width: 490px\" class=\"wp-caption aligncenter\"><a href=\"http:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2013\/08\/130823_VIXX.png\"><img loading=\"lazy\" decoding=\"async\" src=\"http:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2013\/08\/130823_VIXX.png\" alt=\"The VIX breaks down back below the critical pivot point\" width=\"500\" height=\"350\" class=\"size-full wp-image-19499\" srcset=\"https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2013\/08\/130823_VIXX.png 500w, https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2013\/08\/130823_VIXX-300x210.png 300w\" sizes=\"auto, (max-width: 500px) 100vw, 500px\" \/><\/a><figcaption id=\"caption-attachment-19499\" class=\"wp-caption-text\">The VIX breaks down back below the critical pivot point<\/figcaption><\/figure><br \/>\n<\/center><\/p>\n<p>This breakdown reinforces the potential for the S&#038;P 500 to rally further from here. The VIX is once again below the pivot point AND its 50 and 200DMAs. <\/p>\n<p>I am now back to even on my ProShares Ultra S&#038;P 500 (SSO) calls which means I was not aggressive enough on the second tranche of buys. Of course, I could not have known what exactly was coming, and I was reserving powder for a potential third tranche. I am firmly in the green on the PowerShares QQQ Trust (QQQ) calls partially thanks to Friday&#8217;s surge in Microsoft (MSFT) on the overdue news of CEO Steve Ballmer&#8217;s imminent retirement. These call options were purchased aggressively as <a href=\"http:\/\/drduru.com\/onetwentytwo\/2013\/08\/15\/t2108-update-130815\/\" target=\"_blank\">my first quasi-oversold play<\/a>. QQQ (and the NASDAQ) is currently looking even healthier than the S&#038;P 500 with a completed gap fill.<\/p>\n<p><center><br \/>\n<figure id=\"attachment_19502\" aria-describedby=\"caption-attachment-19502\" style=\"width: 490px\" class=\"wp-caption aligncenter\"><a href=\"http:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2013\/08\/130823_QQQ.png\"><img loading=\"lazy\" decoding=\"async\" src=\"http:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2013\/08\/130823_QQQ.png\" alt=\"QQQ fills the gap and looks ready to continue its run\" width=\"500\" height=\"350\" class=\"size-full wp-image-19502\" srcset=\"https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2013\/08\/130823_QQQ.png 500w, https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2013\/08\/130823_QQQ-300x210.png 300w\" sizes=\"auto, (max-width: 500px) 100vw, 500px\" \/><\/a><figcaption id=\"caption-attachment-19502\" class=\"wp-caption-text\">QQQ fills the gap and looks ready to continue its run<\/figcaption><\/figure><br \/>\n<\/center><\/p>\n<p><center><br \/>\n<strong>Daily T2108 vs the S&#038;P 500<\/strong><br \/>\n<img loading=\"lazy\" decoding=\"async\" title=\"T2108 vs. the S&amp;P 500 (DAILY)\" alt=\"T2108 vs. the S&amp;P 500 (DAILY)\" src=\"http:\/\/www.drduru.com\/money\/charts\/T2108-daily_s.png\" width=\"500\" height=\"350\" \/><br \/>\n<\/center><\/p>\n<p>Black line: T2108 (measured on the right); Green line: S&amp;P 500 (for comparative purposes)<br \/>\nRed line: T2108 Overbought (70%); Blue line: T2108 Oversold (20%)<\/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\" title=\"Weekly T2108\" alt=\"Weekly T2108\" src=\"http:\/\/www.drduru.com\/money\/charts\/T2108-weekly_s.png\" width=\"500\" height=\"350\" \/><br \/>\n*<strong>All charts created using <\/strong><\/a><strong><a title=\"Freestockcharts.com\" href=\"http:\/\/www.freestockcharts.com\/\" target=\"_blank\">freestockcharts.com<\/a><\/strong> unless otherwise stated<\/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&amp;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 and QQQ calls<\/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 gap down 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 &#8230; <a title=\"T2108 Update (August 23, 2013) &#8211; Quasi-Oversold Bounce Underway\" class=\"read-more\" href=\"https:\/\/drduru.com\/onetwentytwo\/2013\/08\/24\/t2108-update-130823\/\">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":[483,482,491,135,1154,62],"tags":[1065,492,535,65,446,226,1597,303],"class_list":["post-19496","post","type-post","status-publish","format-standard","hentry","category-breakdown","category-breakout","category-oversold","category-stock-market-trading","category-t2108-model","category-technical-analysis","tag-powershares-qqq-trust","tag-proshares-ultra-sp-500","tag-qqq","tag-sp-500","tag-sso","tag-t2108","tag-technical-analysis","tag-vix"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.4 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>T2108 Update (August 23, 2013) - Quasi-Oversold Bounce Underway - 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\/08\/24\/t2108-update-130823\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"T2108 Update (August 23, 2013) - Quasi-Oversold Bounce Underway - 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 gap down 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 ... 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It helps to identify extremes in market sentiment that are highly gap down 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 ... 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