{"id":27007,"date":"2015-02-14T10:10:18","date_gmt":"2015-02-14T18:10:18","guid":{"rendered":"http:\/\/drduru.com\/onetwentytwo\/?p=27007"},"modified":"2015-02-14T10:37:59","modified_gmt":"2015-02-14T18:37:59","slug":"t2108-update-150213","status":"publish","type":"post","link":"https:\/\/drduru.com\/onetwentytwo\/2015\/02\/14\/t2108-update-150213\/","title":{"rendered":"T2108 Update (February 13, 2015) – Many Bullish Tidings But Not Yet A Convincing All-Time High"},"content":{"rendered":"

<\/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 T2108 Resource Page<\/a>. You can follow real-time T2108 commentary<\/a> on twitter using the #T2108 hashtag. T2108-related trades and other trades are sometimes posted on twitter using the #120trade hashtag<\/a>. T2107 measures the percentage of stocks trading above their respective 200DMAs)<\/p>\n

T2108 Status<\/strong>: 64.5%
\nT2107 Status<\/strong>: 50.6%
\nVIX Status<\/strong>: 14.7
\nGeneral (Short-term) Trading Call<\/strong>: Neutral – waiting to see what happens when\/if T2108 becomes overbought
\nActive T2108 periods<\/strong>: Day #81 over 20%, Day #40 above 30%, Day #20 over 40%, Day #9 over 60% (overperiod), Day #151 under 70%<\/p>\n

Reference Charts<\/strong> (click for view of last 6 months from Stockcharts.com):
\nS&P 500<\/a> or SPY<\/a>
\nSDS<\/a> (ProShares UltraShort S&P500)
\nU.S. Dollar Index<\/a> (volatility index)
\nEEM<\/a> (iShares MSCI Emerging Markets)
\nVIX<\/a> (volatility index)
\nVXX<\/a> (iPath S&P 500 VIX Short-Term Futures ETN)
\nEWG<\/a> (iShares MSCI Germany Index Fund)
\nCAT<\/a> (Caterpillar).<\/p>\n

Commentary<\/strong>
\nThe S&P 500 (SPY) finally closed at a new all-time high on Friday, February 13, 2015, but T2108 is still failing to cooperate. T2108 tentatively closed at 64.5%, still short of overbought status. This “reluctant” behavior of T2108 relative to the S&P 500 was also evident on Wednesday when T2108 notably declined even as the S&P 500 closed essentially flat.<\/p>\n


\n
\"The<\/a>
The first all-time high of 2015<\/figcaption><\/figure><\/p>\n

\"Surprisingly,<\/a>
Surprisingly, T2108 is still not overbought<\/figcaption><\/figure>
\n<\/center><\/p>\n

I am wary about this reluctance because the S&P 500 was trading at the top of the 2015 trading range when T2108 last flirted with overbought status. With the S&P 500 now around 1.5% higher, T2108 should be<\/strong> overbought by now, if not at least retesting that boundary. This failure means that the recent surge has left some stocks behind, at least for now. As a result, I remain very wary of the market overall even as I switched the trading bias from bearish to neutral. This is a very difficult juncture for making short-term trading calls because the S&P 500 and T2108 could combine to flash a bullish signal that quickly turns into a fakeout. Here are my current trading rules for trying to cope with these tricky circumstances:<\/p>\n