{"id":24304,"date":"2014-09-07T18:26:32","date_gmt":"2014-09-08T01:26:32","guid":{"rendered":"http:\/\/drduru.com\/onetwentytwo\/?p=24304"},"modified":"2014-09-07T18:32:14","modified_gmt":"2014-09-08T01:32:14","slug":"t2108-update-140905","status":"publish","type":"post","link":"https:\/\/drduru.com\/onetwentytwo\/2014\/09\/07\/t2108-update-140905\/","title":{"rendered":"T2108 Update (September 5, 2014) &#8211; Close Call As the S&#038;P 500 Avoids Bearish Follow-Through"},"content":{"rendered":"<p><code><\/code>(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>: 59.1%<br \/>\n<strong>VIX Status<\/strong>: 12.1%<br \/>\n<strong>General (Short-term) Trading Call<\/strong>: Hold (Bullish)<br \/>\n<strong>Active T2108 periods<\/strong>: Day #303 over 20% (includes day #280 at 20.01%), Day #17 over 40%, Day #14 over 50% (overperiod), Day #2 under 60%, Day #43 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 5005\" href=\"http:\/\/stockcharts.com\/h-sc\/ui?s=$SPX&amp;p=D&amp;st=2014-03-05&amp;en=2014-09-05&amp;id=p14085208538\" target=\"_blank\">S&amp;P 500<\/a> or <a title=\"6-month chart of SPY\" href=\"http:\/\/stockcharts.com\/h-sc\/ui?s=SPY&amp;p=D&amp;st=2014-03-05&amp;en=2014-09-05&amp;id=p14085208538\" target=\"_blank\">SPY<\/a><br \/>\n<a title=\"6-month chart of SDS\" href=\"http:\/\/stockcharts.com\/h-sc\/ui?s=SDS&amp;p=D&amp;st=2014-03-05&amp;en=2014-09-05&amp;id=p15880085697\" target=\"_blank\">SDS<\/a> (ProShares UltraShort S&amp;P500)<br \/>\n<a title=\"6-month chart of the U.S. dollar\" href=\"http:\/\/stockcharts.com\/h-sc\/ui?s=$USD&amp;p=D&amp;st=2014-03-05&amp;en=2014-09-05&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=2014-03-05&amp;en=2014-09-05&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=2014-03-05&amp;en=2014-09-05&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=2014-03-05&amp;en=2014-09-05&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=2014-03-05&amp;en=2014-09-05&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=2014-03-05&amp;en=2014-09-05&amp;id=p15880085697\" target=\"_blank\">CAT<\/a> (Caterpillar).<\/p>\n<p><strong>Commentary<\/strong><br \/>\n<a href=\"http:\/\/drduru.com\/onetwentytwo\/2014\/09\/03\/t2108-update-140903\/\" target=\"_blank\">Market conditions turned a bit ominous at the close of trading on Wednesday, September 3rd<\/a>. I was on the lookout for follow-through. Sure enough, the next day, sellers were able to send the S&#038;P 500 (SPY) and the NASDAQ (QQQ) down again, even if marginally. In particular the NASDAQ broke its primary uptrend by closing below the first Bollinger Band (BB). On Friday, the S&#038;P 500 came roaring back from initial selling to close with a fresh all-time closing high. The NASDAQ suddenly found itself slightly under-performing as its comeback did not wipe out the bearish read from Wednesday.<\/p>\n<p><center><br \/>\n<figure id=\"attachment_24306\" aria-describedby=\"caption-attachment-24306\" style=\"width: 540px\" class=\"wp-caption aligncenter\"><a href=\"http:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2014\/09\/140905_SP500.png\"><img loading=\"lazy\" decoding=\"async\" src=\"http:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2014\/09\/140905_SP500.png\" alt=\"The S&amp;P 500 wipes out bearish tidings in one swift intra-day reversal\" width=\"550\" height=\"375\" class=\"size-full wp-image-24306\" srcset=\"https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2014\/09\/140905_SP500.png 550w, https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2014\/09\/140905_SP500-300x204.png 300w\" sizes=\"auto, (max-width: 550px) 100vw, 550px\" \/><\/a><figcaption id=\"caption-attachment-24306\" class=\"wp-caption-text\">The S&#038;P 500 wipes out bearish tidings in one swift intra-day reversal<\/figcaption><\/figure><\/p>\n<p><figure id=\"attachment_24305\" aria-describedby=\"caption-attachment-24305\" style=\"width: 540px\" class=\"wp-caption aligncenter\"><a href=\"http:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2014\/09\/140905_NASDAQ.png\"><img loading=\"lazy\" decoding=\"async\" src=\"http:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2014\/09\/140905_NASDAQ.png\" alt=\"The NASDAQ&#039;s comeback still leaves the index contending with an ominous bearish engulfing pattern\" width=\"550\" height=\"375\" class=\"size-full wp-image-24305\" srcset=\"https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2014\/09\/140905_NASDAQ.png 550w, https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2014\/09\/140905_NASDAQ-300x204.png 300w\" sizes=\"auto, (max-width: 550px) 100vw, 550px\" \/><\/a><figcaption id=\"caption-attachment-24305\" class=\"wp-caption-text\">The NASDAQ&#8217;s comeback still leaves the index contending with an ominous bearish engulfing pattern<\/figcaption><\/figure><br \/>\n<\/center><\/p>\n<p>This is what I call a close call. On Friday morning, I was mentally writing an incrementally more bearish stock market update. Instead, I am now writing a mixed piece that maintains the bullish bias in the trading call. There is one caveat: T2108 is still well off its recent high for this cycle.<\/p>\n<p>T2108 closed at 59.1%. It was as high as 65.5% on Wednesday before the market faded. This behavior is not a bearish divergence because T2108 closed with a gain, not a loss. What has my attention right now is T2108 lagging the S&#038;P 500. The lagging takes on more weight with the NASDAQ&#8217;s performance and loss of its primary uptrend. It is not likely such lagging can persist for long without the S&#038;P 500 reversing, so I am &#8220;on alert.&#8221;<\/p>\n<p>Finally, traders must pay closer attention to currency markets if they have gotten in the habit of ignoring them. I wrote a related piece called &#8220;<a href=\"http:\/\/seekingalpha.com\/article\/2476765-the-u-s-dollar-is-strong-but-what-about-carry\" target=\"_blank\">The U.S. Dollar Is Strong But&#8230;What About Carry?<\/a>&#8221; In particular, the ECB&#8217;s push to ramp up liquidity in the eurozone economy provides a fresh source of funds to fuel more trades, more investments, and even less volatility. Weary bears are facing an army with supply lines restocked, re-fortified, and ammunition for as far as the radar can see. I think the resolution of these new battle lines will become pretty apparent in the coming weeks. Stay tuned.<\/p>\n<p><center><br \/>\n<figure id=\"attachment_24278\" aria-describedby=\"caption-attachment-24278\" style=\"width: 540px\" class=\"wp-caption aligncenter\"><a href=\"http:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2014\/09\/130905_DXY0.png\"><img loading=\"lazy\" decoding=\"async\" src=\"http:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2014\/09\/130905_DXY0.png\" alt=\"The U.S. dollar index finally breaks out\" width=\"550\" height=\"375\" class=\"size-full wp-image-24278\" srcset=\"https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2014\/09\/130905_DXY0.png 550w, https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2014\/09\/130905_DXY0-300x204.png 300w\" sizes=\"auto, (max-width: 550px) 100vw, 550px\" \/><\/a><figcaption id=\"caption-attachment-24278\" class=\"wp-caption-text\">The U.S. dollar index finally breaks out<\/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\" title=\"T2108 vs. the S&amp;P 500 (DAILY)\" alA=\"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: 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 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 (September 5, 2014) &#8211; Close Call As the S&#038;P 500 Avoids Bearish Follow-Through\" class=\"read-more\" href=\"https:\/\/drduru.com\/onetwentytwo\/2014\/09\/07\/t2108-update-140905\/\">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":[62],"tags":[413,65,226,1597],"class_list":["post-24304","post","type-post","status-publish","format-standard","hentry","category-technical-analysis","tag-nasdaq","tag-sp-500","tag-t2108","tag-technical-analysis"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.4 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>T2108 Update (September 5, 2014) - Close Call As the S&amp;P 500 Avoids Bearish Follow-Through - 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\/09\/07\/t2108-update-140905\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"T2108 Update (September 5, 2014) - Close Call As the S&amp;P 500 Avoids Bearish Follow-Through - 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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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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