{"id":21098,"date":"2014-01-14T19:46:33","date_gmt":"2014-01-15T03:46:33","guid":{"rendered":"http:\/\/drduru.com\/onetwentytwo\/?p=21098"},"modified":"2014-01-14T19:46:33","modified_gmt":"2014-01-15T03:46:33","slug":"t2108-update-140114","status":"publish","type":"post","link":"https:\/\/drduru.com\/onetwentytwo\/2014\/01\/14\/t2108-update-140114\/","title":{"rendered":"T2108 Update (January 14, 2014) &#8211; Whiplash (for example, SPY, GOOG, AAPL, TSLA, and ISRG)"},"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 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>: 65.8%<br \/>\n<strong>VIX Status<\/strong>: 12.3<br \/>\n<strong>General (Short-term) Trading Call<\/strong>: Short (bearish bias).<br \/>\n<strong>Active T2108 periods<\/strong>: Day #133 over 20%, Day #8 over 60% (overperiod), Day #48 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=$SPX&amp;p=D&amp;st=2013-07-14&amp;en=2014-01-14&amp;id=p14085208538\" target=\"_blank\">S&amp;P 500<\/a> or <a title=\"6-month chart of SPY\" href=\"http:\/\/stockcharts.com\/h-sc\/ui?s=SPY&amp;p=D&amp;st=2013-07-14&amp;en=2014-01-14&amp;id=p14085208538\" target=\"_blank\">SPY<\/a><br \/>\n<a title=\"6-month chart of SDS\" href=\"http:\/\/stockcharts.com\/h-sc\/ui?s=SDS&amp;p=D&amp;st=2013-07-14&amp;en=2014-01-14&amp;id=p15880085697\" target=\"_blank\">SDS<\/a> (ProShares UltraShort S&amp;P500)<br \/>\n<a title=\"6-month chart of the U.S. dollar\" href=\"http:\/\/stockcharts.com\/h-sc\/ui?s=$USD&amp;p=D&amp;st=2013-07-14&amp;en=2014-01-14&amp;id=p25615696567\" target=\"_blank\">U.S. Dollar Index<\/a> (volatility index)<br \/>\n<a title=\"6-month chart of EEM\" href=\"http:\/\/stockcharts.com\/h-sc\/ui?s=EEM&amp;p=D&amp;st=2013-07-14&amp;en=2014-01-14&amp;id=p15880085697\" target=\"_blank\">EEM<\/a> (iShares MSCI Emerging Markets)<br \/>\n<a title=\"6-month chart of the VIX\" href=\"http:\/\/stockcharts.com\/h-sc\/ui?s=$VIX&amp;p=D&amp;st=2013-07-14&amp;en=2014-01-14&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=2013-07-14&amp;en=2014-01-14&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=2013-07-14&amp;en=2014-01-14&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=2013-07-14&amp;en=2014-01-14&amp;id=p15880085697\" target=\"_blank\">CAT<\/a> (Caterpillar)<\/p>\n<p><strong>Commentary<\/strong><br \/>\nWhiplash.<\/p>\n<p>That is the best way to describe the trading so far this week. Just when I thought it safe to switch from a bullish to a bearish bias, the S&#038;P 500 zips upward, almost reversing all of Monday&#8217;s losses. The S&#038;P 500 remains in the bearish zone, but I am now on alert and bracing for another sentiment shift given the strength of today&#8217;s move.<\/p>\n<p><center><br \/>\n<figure id=\"attachment_21104\" aria-describedby=\"caption-attachment-21104\" style=\"width: 540px\" class=\"wp-caption aligncenter\"><a href=\"http:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2014\/01\/140114_SP500.png\"><img loading=\"lazy\" decoding=\"async\" src=\"http:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2014\/01\/140114_SP500.png\" alt=\"Whiplash on the S&amp;P 500 as the bear\/bull zone holds\" width=\"550\" height=\"375\" class=\"size-full wp-image-21104\" srcset=\"https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2014\/01\/140114_SP500.png 550w, https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2014\/01\/140114_SP500-300x204.png 300w\" sizes=\"auto, (max-width: 550px) 100vw, 550px\" \/><\/a><figcaption id=\"caption-attachment-21104\" class=\"wp-caption-text\">Whiplash on the S&#038;P 500 as the bear\/bull zone holds<\/figcaption><\/figure><br \/>\n<\/center><\/p>\n<p>T2108 closed the day at 65.8% &#8211; &#8220;two hairs&#8221; away from overbought. If the market goes into overbought from here, I will be in the always uncomfortable position of calling for an extended overbought run. For now, the bias remains bearish. I even stuck to the rules I laid out in the last T2108 Update and opened up my first tranche of ProShares Ultra S&#038;P500 (SSO) puts. I was happy to get the puts for a small discount on the bounce. I bought a little early but the puts did not decline enough by the close to justify going for the second tranche. That purchase may happen on the next bounce&#8230;.<\/p>\n<p>The bullish action allowed me to exit my UVXY puts at a profit. UVXY closed the day down 8.2% with a fresh all-time low. After yesterday&#8217;s near miss at my higher profit target, I was eager to call it a wrap. Seeing UVXY&#8217;s reversal has firmed my opinion (trading strategy) that all rallies in UVXY must be faded.<\/p>\n<p>The 2-day whiplash in the major indices is nothing compared to some of the whiplash in individual stocks. I will use a chart review to go through three examples.<\/p>\n<p>In <a href=\"http:\/\/drduru.com\/onetwentytwo\/2014\/01\/13\/t2108-update-140113\/\" target=\"_blank\">the last T2108 Update<\/a>, I talked about the successful Google (GOOG) trade using a model fashioned after the Apple Trading Model (ATM). The odds from that model projected another down day. Just like Monday, I waited out the initial pop in the stock before buying a put option. THIS time, GOOG kept motoring right through what should have been resistance from Monday&#8217;s high. So after a sharp reversal on Monday to close down on the day, GOOG turns right around with a strong 2.4% gain to fresh all-time highs. The model projects 55% odds for upside tomorrow. These odds are not strong enough to justify a trade, but the technicals alone remind us that GOOG&#8217;s overall bias remains <strong>firmly<\/strong> up and to the right.<\/p>\n<p><center><br \/>\n<figure id=\"attachment_21100\" aria-describedby=\"caption-attachment-21100\" style=\"width: 540px\" class=\"wp-caption aligncenter\"><a href=\"http:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2014\/01\/140114_GOOG.png\"><img loading=\"lazy\" decoding=\"async\" src=\"http:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2014\/01\/140114_GOOG.png\" alt=\"GOOG maintains its strong uptrend through the intraday whiplash\" width=\"550\" height=\"375\" class=\"size-full wp-image-21100\" srcset=\"https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2014\/01\/140114_GOOG.png 550w, https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2014\/01\/140114_GOOG-300x204.png 300w\" sizes=\"auto, (max-width: 550px) 100vw, 550px\" \/><\/a><figcaption id=\"caption-attachment-21100\" class=\"wp-caption-text\">GOOG maintains its strong uptrend through the intraday whiplash<\/figcaption><\/figure><br \/>\n<\/center><\/p>\n<p>Apple (AAPL) put on a major surprise by powering right through its 50DMA resistance. In yesterday&#8217;s T2108 Update, I noted that the ATM produced 100% odds of an up day but near certainty of a fade from the open. I also noted that I was much more interested in fading than in playing the upside. My sentiment was influenced by a combination of the on-going downtrend channel and an assumption that the 50DMA resistance would hold. Now, AAPL is in the &#8220;open field.&#8221; A close above the downtrending 20DMA will be a bullish turning point in the stock. For tomorrow, the ATM produced 73% odds of upside and 47% odds of a continuation of upside from the open.<\/p>\n<p><center><br \/>\n<figure id=\"attachment_21103\" aria-describedby=\"caption-attachment-21103\" style=\"width: 540px\" class=\"wp-caption aligncenter\"><a href=\"http:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2014\/01\/140114_AAPL.png\"><img loading=\"lazy\" decoding=\"async\" src=\"http:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2014\/01\/140114_AAPL.png\" alt=\"Apple breaks free for what now looks like another sloppy retest of 50DMA *support*\" width=\"550\" height=\"375\" class=\"size-full wp-image-21103\" srcset=\"https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2014\/01\/140114_AAPL.png 550w, https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2014\/01\/140114_AAPL-300x204.png 300w\" sizes=\"auto, (max-width: 550px) 100vw, 550px\" \/><\/a><figcaption id=\"caption-attachment-21103\" class=\"wp-caption-text\">Apple breaks free for what now looks like another sloppy retest of 50DMA *support*<\/figcaption><\/figure><br \/>\n<\/center><\/p>\n<p>Tesla Motors (TSLA) enjoyed a breakout day in an awesome display of whiplash. As of yesterday, the stock looked ready for a fresh sell-off as it sagged well below 50DMA resistance. The company released good news about deliveries and BAM! A 15.7% gain in a flash the took the stock to a fresh 2-month high that cleared all sorts of resistance. I just barely missed playing this action. I had a stock alert set for $143, but I was slow to look for any news. Before I realized what was going on, the stock was already up 8% and well-above my comfortzone for an attempt at a quick trade.<\/p>\n<p><center><br \/>\n<figure id=\"attachment_21101\" aria-describedby=\"caption-attachment-21101\" style=\"width: 540px\" class=\"wp-caption aligncenter\"><a href=\"http:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2014\/01\/140114_TSLA.png\"><img loading=\"lazy\" decoding=\"async\" src=\"http:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2014\/01\/140114_TSLA.png\" alt=\"TSLA breaks out - you can almost hear the crowded shorts scream bloody murder\" width=\"550\" height=\"375\" class=\"size-full wp-image-21101\" srcset=\"https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2014\/01\/140114_TSLA.png 550w, https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2014\/01\/140114_TSLA-300x204.png 300w\" sizes=\"auto, (max-width: 550px) 100vw, 550px\" \/><\/a><figcaption id=\"caption-attachment-21101\" class=\"wp-caption-text\">TSLA breaks out &#8211; you can almost hear the crowded shorts scream bloody murder<\/figcaption><\/figure><br \/>\n<\/center><\/p>\n<p>The biggest whiplash of the day (besides perhaps <a href=\"http:\/\/stockcharts.com\/h-sc\/ui?s=ICPT&#038;p=D&#038;st=2013-10-14&#038;en=2014-10-14&#038;id=p15880085697\" target=\"_blank\">Intercept Pharmaceuticals<\/a>!) was Intuitive Surgical (ISRG). I also talked about this trade in the last T2108 Update, and it turned into what I believe is one of my biggest single-day trades of all-time. My main regret is that my readers could not profit along with me because I bought my call option near the close of the day, and I did not talk about it until the T2108 Update. While I concluded that &#8220;something is up,&#8221; I sure was not anticipating anything like this.<\/p>\n<p>ISRG pre-announced earnings and clearly delivered some (temporary) relief to traders and investors. The stock soared about 12% at the open, and I promptly sold my call option at a 13x increase in value (I forgot to mention that I threw in some shares for good measure in case I had to wait beyond this week for &#8220;something&#8221; to happen). I was not surprised to see the stock promptly fade since it was so high above the upper-Bollinger Band (BB), but I am a bit surprised the stock faded so far that it closed below its 200DMA (equal to Friday&#8217;s big close).<\/p>\n<p>I am sure Herb Greenberg&#8217;s reiteration of his skepticism helped grease the skids.<\/p>\n<p><center><br \/>\n<object id=\"cnbcplayer\" height=\"380\" width=\"400\" classid=\"clsid:D27CDB6E-AE6D-11cf-96B8-444553540000\" codebase=\"http:\/\/download.macromedia.com\/pub\/shockwave\/cabs\/flash\/swflash.cab#version=9,0,0,0\" ><param name=\"type\" value=\"application\/x-shockwave-flash\"\/><param name=\"allowfullscreen\" value=\"true\"\/><param name=\"allowscriptaccess\" value=\"always\"\/><param name=\"quality\" value=\"best\"\/><param name=\"scale\" value=\"noscale\" \/><param name=\"wmode\" value=\"transparent\"\/><param name=\"bgcolor\" value=\"#000000\"\/><param name=\"salign\" value=\"lt\"\/><param name=\"flashVars\" value=\"startTime=000\"\/><param name=\"flashVars\" value=\"endTime=000\"\/><param name=\"movie\" value=\"http:\/\/plus.cnbc.com\/rssvideosearch\/action\/player\/id\/3000235845\/code\/cnbcplayershare\" \/><embed name=\"cnbcplayer\" PLUGINSPAGE=\"http:\/\/www.macromedia.com\/go\/getflashplayer\" allowfullscreen=\"true\" allowscriptaccess=\"always\" bgcolor=\"#000000\" height=\"380\" width=\"400\" quality=\"best\" wmode=\"transparent\" scale=\"noscale\" salign=\"lt\" src=\"http:\/\/plus.cnbc.com\/rssvideosearch\/action\/player\/id\/3000235845\/code\/cnbcplayershare\" type=\"application\/x-shockwave-flash\" \/><\/object><br \/>\n<\/center><\/p>\n<p>ISRG has earned a permanent spot on my trading watch list. I will include the company&#8217;s pre-announcement when I do my write-up on the recent articles in ACOG.<\/p>\n<p><center><br \/>\n<figure id=\"attachment_21102\" aria-describedby=\"caption-attachment-21102\" style=\"width: 540px\" class=\"wp-caption aligncenter\"><a href=\"http:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2014\/01\/140114_ISRG.png\"><img loading=\"lazy\" decoding=\"async\" src=\"http:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2014\/01\/140114_ISRG.png\" alt=\"Ituitive Surgical breaks out in a brief moment of post-earnings news relief\" width=\"550\" height=\"375\" class=\"size-full wp-image-21102\" srcset=\"https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2014\/01\/140114_ISRG.png 550w, https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2014\/01\/140114_ISRG-300x204.png 300w\" sizes=\"auto, (max-width: 550px) 100vw, 550px\" \/><\/a><figcaption id=\"caption-attachment-21102\" class=\"wp-caption-text\">Ituitive Surgical breaks out in a brief moment of post-earnings news relief<\/figcaption><\/figure><br \/>\n<\/center><\/p>\n<p>Finally, speaking of &#8220;something up,&#8221; I think there is something up with the general stock market. This whiplash &#8220;feels&#8221; like the prelude to something big in SOME direction. Bullish and bearish traders need to be on their toes more than normal, ready to pounce on opportunity in an instant.<\/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 SPHB and SPLV and SSO puts (pairs trade), long AAPL shares and puts, long GOOG 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 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 are &#8230; <a title=\"T2108 Update (January 14, 2014) &#8211; Whiplash (for example, SPY, GOOG, AAPL, TSLA, and ISRG)\" class=\"read-more\" href=\"https:\/\/drduru.com\/onetwentytwo\/2014\/01\/14\/t2108-update-140114\/\">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":[368,482,300,219,511,62,920],"tags":[250,534,231,230,401,145,65,446,226,1597,888,887,1092],"class_list":["post-21098","post","type-post","status-publish","format-standard","hentry","category-automotive","category-breakout","category-health-care","category-high-tech","category-support","category-technical-analysis","category-uptrend","tag-aapl","tag-apple-inc","tag-goog","tag-google","tag-intuitive-surgical-inc","tag-isrg","tag-sp-500","tag-sso","tag-t2108","tag-technical-analysis","tag-tesla-motors-inc","tag-tsla","tag-uvxy"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.4 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>T2108 Update (January 14, 2014) - Whiplash (for example, SPY, GOOG, AAPL, TSLA, and ISRG) - 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\/2014\/01\/14\/t2108-update-140114\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"T2108 Update (January 14, 2014) - Whiplash (for example, SPY, GOOG, AAPL, TSLA, and ISRG) - 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 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 are ... 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