{"id":24725,"date":"2014-09-29T20:19:06","date_gmt":"2014-09-30T03:19:06","guid":{"rendered":"http:\/\/drduru.com\/onetwentytwo\/?p=24725"},"modified":"2014-09-29T20:29:58","modified_gmt":"2014-09-30T03:29:58","slug":"t2108-update-140929","status":"publish","type":"post","link":"https:\/\/drduru.com\/onetwentytwo\/2014\/09\/29\/t2108-update-140929\/","title":{"rendered":"T2108 Update (September 29, 2014) &#8211; Oh So Close to Oversold and &#8220;Close Enough&#8221; To A Buy?"},"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 sometimes posted on twitter using <a href=\"http:\/\/twitter.com\/#!\/search\/%23120trade\" target=\"_blank\">the #120trade hashtag<\/a>. T2107 measures the percentage of stocks trading above their respective 200DMAs)<\/p>\n<p><strong>T2108 Status<\/strong>: 23.7%<br \/>\n<strong>T2107 Status<\/strong>: 45.1% (exactly matches 7 1\/2 month closing low set on Friday)<br \/>\n<strong>VIX Status<\/strong>: 15.98<br \/>\n<strong>General (Short-term) Trading Call<\/strong>: Hold (TRADERS REMAIN READY FOR WIDE SWINGS)<br \/>\n<strong>Active T2108 periods<\/strong>: Day #318 over 20% (includes day #280 at 20.03%, day #318 low at 20.25%), Day #5 under 30% (underperiod), Day #11 under 40%, Day #13 under 50%, Day #15 under 60%, Day #57 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=$SPX&amp;p=D&amp;st=2014-03-29&amp;en=2014-09-29&amp;id=p14085208538\" target=\"_blank\">S&amp;P 500<\/a> or <a title=\"6-month chart of SPY\" href=\"http:\/\/stockcharts.com\/h-sc\/ui?s=SPY&amp;p=D&amp;st=2014-03-29&amp;en=2014-09-29&amp;id=p14085208538\" target=\"_blank\">SPY<\/a><br \/>\n<a title=\"6-month chart of SDS\" href=\"http:\/\/stockcharts.com\/h-sc\/ui?s=SDS&amp;p=D&amp;st=2014-03-29&amp;en=2014-09-29&amp;id=p15880085697\" target=\"_blank\">SDS<\/a> (ProShares UltraShort S&amp;P500)<br \/>\n<a title=\"6-month chart of the U.S. dollar\" href=\"http:\/\/stockcharts.com\/h-sc\/ui?s=$USD&amp;p=D&amp;st=2014-03-29&amp;en=2014-09-29&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=2014-03-29&amp;en=2014-09-29&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=2014-03-29&amp;en=2014-09-29&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=2014-03-29&amp;en=2014-09-29&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=2014-03-29&amp;en=2014-09-29&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=2014-03-29&amp;en=2014-09-29&amp;id=p15880085697\" target=\"_blank\">CAT<\/a> (Caterpillar).<\/p>\n<p><strong>Commentary<\/strong><br \/>\nSo today delivered <a href=\"http:\/\/drduru.com\/onetwentytwo\/2014\/09\/25\/t2108-update-140925\/\" target=\"_blank\">the gap down I was looking for on Friday<\/a>. Still, T2108 did not quite reach oversold territory. It got as low as a tantalizing 20.03%. <\/p>\n<p><center><br \/>\n<figure id=\"attachment_24728\" aria-describedby=\"caption-attachment-24728\" style=\"width: 540px\" class=\"wp-caption aligncenter\"><a href=\"http:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2014\/09\/140929_T2108.png\"><img loading=\"lazy\" decoding=\"async\" src=\"http:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2014\/09\/140929_T2108.png\" alt=\"Close enough? Tantalizingly close to oversold before bouncing\" width=\"550\" height=\"375\" class=\"size-full wp-image-24728\" srcset=\"https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2014\/09\/140929_T2108.png 550w, https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2014\/09\/140929_T2108-300x204.png 300w\" sizes=\"auto, (max-width: 550px) 100vw, 550px\" \/><\/a><figcaption id=\"caption-attachment-24728\" class=\"wp-caption-text\">Close enough? Tantalizingly close to oversold before bouncing<\/figcaption><\/figure><br \/>\n<\/center><\/p>\n<p>T2107 also dipped. Unlike T2108, its intraday recovery only took it back to last Thursday&#8217;s close.<\/p>\n<p><center><br \/>\n<figure id=\"attachment_24727\" aria-describedby=\"caption-attachment-24727\" style=\"width: 540px\" class=\"wp-caption aligncenter\"><a href=\"http:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2014\/09\/140929_T2107.png\"><img loading=\"lazy\" decoding=\"async\" src=\"http:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2014\/09\/140929_T2107.png\" alt=\"T2107 bounces but remains at a major low for the year\" width=\"550\" height=\"375\" class=\"size-full wp-image-24727\" srcset=\"https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2014\/09\/140929_T2107.png 550w, https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2014\/09\/140929_T2107-300x204.png 300w\" sizes=\"auto, (max-width: 550px) 100vw, 550px\" \/><\/a><figcaption id=\"caption-attachment-24727\" class=\"wp-caption-text\">T2107 bounces but remains at a major low for the year<\/figcaption><\/figure><br \/>\n<\/center><\/p>\n<p>The question now of course is whether this drop was &#8220;close enough&#8221; to triggering oversold conditions. The move off the bottom was too quick for me to react intraday. Moreover, I prefer a CLOSE in oversold conditions before lining up my trades on oversold conditions. To add to my hesitancy, the major indices, the S&#038;P 500 (SPY) and the NASDAQ (QQQ), are struggling at their 50-day moving averages (DMAs). <\/p>\n<p><center><br \/>\n<figure id=\"attachment_24730\" aria-describedby=\"caption-attachment-24730\" style=\"width: 540px\" class=\"wp-caption aligncenter\"><a href=\"http:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2014\/09\/140929_SP500.png\"><img loading=\"lazy\" decoding=\"async\" src=\"http:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2014\/09\/140929_SP500.png\" alt=\"The S&amp;P 500 bounces right back to the 50DMA after gapping down\" width=\"550\" height=\"375\" class=\"size-full wp-image-24730\" srcset=\"https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2014\/09\/140929_SP500.png 550w, https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2014\/09\/140929_SP500-300x204.png 300w\" sizes=\"auto, (max-width: 550px) 100vw, 550px\" \/><\/a><figcaption id=\"caption-attachment-24730\" class=\"wp-caption-text\">The S&#038;P 500 bounces right back to the 50DMA after gapping down<\/figcaption><\/figure><br \/>\nNote that the S&#038;P 500 does not show the proper open. SPY shows the gap down.<\/p>\n<p><figure id=\"attachment_24729\" aria-describedby=\"caption-attachment-24729\" style=\"width: 540px\" class=\"wp-caption aligncenter\"><a href=\"http:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2014\/09\/140929_NASDAQ.png\"><img loading=\"lazy\" decoding=\"async\" src=\"http:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2014\/09\/140929_NASDAQ.png\" alt=\"The NASDAQ struggles to hold onto 50DMA support\" width=\"550\" height=\"375\" class=\"size-full wp-image-24729\" srcset=\"https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2014\/09\/140929_NASDAQ.png 550w, https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2014\/09\/140929_NASDAQ-300x204.png 300w\" sizes=\"auto, (max-width: 550px) 100vw, 550px\" \/><\/a><figcaption id=\"caption-attachment-24729\" class=\"wp-caption-text\">The NASDAQ struggles to hold onto 50DMA support<\/figcaption><\/figure><br \/>\n<\/center><\/p>\n<p>Finally, on the positive side, the VIX, the volatility index, gapped up and then failed to beat the high from August 1st that marked the peak of the last sell-off.<\/p>\n<p><center><br \/>\n<figure id=\"attachment_24726\" aria-describedby=\"caption-attachment-24726\" style=\"width: 540px\" class=\"wp-caption aligncenter\"><a href=\"http:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2014\/09\/140929_VIX.png\"><img loading=\"lazy\" decoding=\"async\" src=\"http:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2014\/09\/140929_VIX.png\" alt=\"The VIX fades right at resistance but remains above 15.35 pivot\" width=\"550\" height=\"375\" class=\"size-full wp-image-24726\" srcset=\"https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2014\/09\/140929_VIX.png 550w, https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2014\/09\/140929_VIX-300x204.png 300w\" sizes=\"auto, (max-width: 550px) 100vw, 550px\" \/><\/a><figcaption id=\"caption-attachment-24726\" class=\"wp-caption-text\">The VIX fades right at resistance but remains above 15.35 pivot<\/figcaption><\/figure><br \/>\n<\/center><\/p>\n<p>So, on balance, the trading call remains on HOLD yet again. IF the indices manage a solid close above the 50DMA -meaning a close above Thursday&#8217;s high as well &#8211; I will feel comfortable assuming that oversold conditions are behind us. Ironically, I will feel even MORE comfortable initiating buys if the S&#038;P 500 generates some more palpable fear with a large spike in the VIX, a T2108 below 18% (the low from the last sell-off), and even an S&#038;P 500 that cracks September&#8217;s low. Stay tuned!<\/p>\n<p><\/center><strong>Daily T2108 vs the S&amp;P 500<\/strong><br \/>\n<img loading=\"lazy\" decoding=\"async\" title=\"T2108 vs. the S&amp;P 500 (DAILY)\" src=\"http:\/\/www.drduru.com\/money\/charts\/T2108-daily_s.png\" alt=\"\" width=\"500\" height=\"350\" \/><\/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%)<\/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\" src=\"http:\/\/www.drduru.com\/money\/charts\/T2108-weekly_s.png\" alt=\"Weekly T2108\" 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><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: net short the Australian dollar<\/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 29, 2014) &#8211; Oh So Close to Oversold and &#8220;Close Enough&#8221; To A Buy?\" class=\"read-more\" href=\"https:\/\/drduru.com\/onetwentytwo\/2014\/09\/29\/t2108-update-140929\/\">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":[65,225,226,1597,303,931],"class_list":["post-24725","post","type-post","status-publish","format-standard","hentry","category-technical-analysis","tag-sp-500","tag-t2107","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 (September 29, 2014) - Oh So Close to Oversold and &quot;Close Enough&quot; To A Buy? - 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\/29\/t2108-update-140929\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"T2108 Update (September 29, 2014) - Oh So Close to Oversold and &quot;Close Enough&quot; To A Buy? - 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 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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