{"id":27552,"date":"2015-03-17T21:10:54","date_gmt":"2015-03-18T04:10:54","guid":{"rendered":"http:\/\/drduru.com\/onetwentytwo\/?p=27552"},"modified":"2015-03-17T21:11:06","modified_gmt":"2015-03-18T04:11:06","slug":"t2108-update-150317","status":"publish","type":"post","link":"https:\/\/drduru.com\/onetwentytwo\/2015\/03\/17\/t2108-update-150317\/","title":{"rendered":"T2108 Update (March 17, 2015) &#8211; A Surprising Calm"},"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 occasionally 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>: 45.3%<br \/>\n<strong>T2107 Status<\/strong>: 47.2%<br \/>\n<strong>VIX Status<\/strong>: 15.7<br \/>\n<strong>General (Short-term) Trading Call<\/strong>: Staying bearish until new all-time high or oversold. Fading rallies<br \/>\n<strong>Active T2108 periods<\/strong>: Day #102 over 20%, Day #61 above 30%, Day #5 above 40% (overperiod), Day #8 under 50%, Day #8 under 60%, Day #172 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=$SPX&amp;p=D&amp;st=2014-09-17&amp;en=2015-03-17&amp;id=p14085208538\" target=\"_blank\">S&amp;P 500<\/a> or <a title=\"6-month chart of SPY\" href=\"http:\/\/stockcharts.com\/h-sc\/ui?s=SPY&amp;p=D&amp;st=2014-09-17&amp;en=2015-03-17&amp;id=p14085208538\" target=\"_blank\">SPY<\/a><br \/>\n<a title=\"6-month chart of SDS\" href=\"http:\/\/stockcharts.com\/h-sc\/ui?s=SDS&amp;p=D&amp;st=2014-09-17&amp;en=2015-03-17&amp;id=p15880085697\" target=\"_blank\">SDS<\/a> (ProShares UltraShort S&amp;P500)<br \/>\n<a title=\"6-month chart of the U.S. dollar\" href=\"http:\/\/stockcharts.com\/h-sc\/ui?s=$USD&amp;p=D&amp;st=2014-09-17&amp;en=2015-03-17&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=2014-09-17&amp;en=2015-03-17&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=2014-09-17&amp;en=2015-03-17&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=2014-09-17&amp;en=2015-03-17&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=2014-09-17&amp;en=2015-03-17&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=2014-09-17&amp;en=2015-03-17&amp;id=p15880085697\" target=\"_blank\">CAT<\/a> (Caterpillar).<\/p>\n<p><strong>Commentary<\/strong><br \/>\nThe stock market is ALMOST right where I left it after <a href=\"http:\/\/drduru.com\/onetwentytwo\/2015\/03\/12\/t2108-update-150312\/\" target=\"_blank\">my last T2108 Update on March 12th<\/a>. On the 13th, I seemed to nail the pre\/post-Fed trade narrative when the S&#038;P 500 (SPY) reversed its entire gain from the previous day. However, the index bounced from the lows, reversed half its loss, and it is now floating above its 50DMA all over again.<\/p>\n<p><center><br \/>\n<figure id=\"attachment_27553\" aria-describedby=\"caption-attachment-27553\" style=\"width: 540px\" class=\"wp-caption aligncenter\"><a href=\"http:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2015\/03\/150317_SP500.png\"><img loading=\"lazy\" decoding=\"async\" src=\"http:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2015\/03\/150317_SP500.png\" alt=\"Suddenly, the S&amp;P 500 appears to be welcoming the Fed meeting\" width=\"550\" height=\"375\" class=\"size-full wp-image-27553\" srcset=\"https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2015\/03\/150317_SP500.png 550w, https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2015\/03\/150317_SP500-300x205.png 300w\" sizes=\"auto, (max-width: 550px) 100vw, 550px\" \/><\/a><figcaption id=\"caption-attachment-27553\" class=\"wp-caption-text\">Suddenly, the S&#038;P 500 appears to be welcoming the Fed meeting<\/figcaption><\/figure><br \/>\n<\/center><\/p>\n<p>Interestingly, while the S&#038;P 500 has made some progress, T2108 and the VIX are both still stuck where I last left them. This is not quite a bearish divergence, but it once again makes me suspicious of the S&#038;P 500&#8217;s move higher. So, the trading call remains firmly bearish despite the index&#8217;s ability to trade above its 50DMA. <\/p>\n<p>I made some changes to my T2108 trade. On Friday, I took advantage of the reversal and sold almost half my put options in ProShares Ultra S&#038;P500 (SSO). Of course, I wish I had sold them all. I left a decent profit on the table in my last round of call options on ProShares Ultra VIX Short-Term Futures (UVXY). Only a BIG post-Fed disappointment can put these back into the green at this point. I also took profits on long side of my hedged play on iShares MSCI Emerging Markets (EEM). I am now sitting on completely unhedged EEM put options.<\/p>\n<p>The surprising calm going into the Federal Reserve&#8217;s next decision on monetary policy has me thinking that the reverse of my expectations will play out. That is, instead of the Fed feeling a need to calm markets down and assure them as usual, the Fed might actually take this opportunity to make it abundantly clear that rates are about to go up. I fully expect the market to reverse under such a scenario. However, I highly doubt such a pullback will lead to sustained and major selling, so under such a scenario I will look to significantly reduce my bearish bets. T2108 is still just in the mid 40s anyway. (I am REALLY disappointed that the market is not set up for my favorite post-Fed fade volatility trade!).<\/p>\n<p>If the market makes it through the Fed just fine, then I am back to neutral mode waiting to see what happens on the next retest or visit to overbought territory.<\/p>\n<p>Now for some charts while we wait. My commentaries are in the captions of the charts. As always, I allow for some wiggle room when it comes to individual stocks versus my overall market trading call.<\/p>\n<p><center><br \/>\n<figure id=\"attachment_27554\" aria-describedby=\"caption-attachment-27554\" style=\"width: 540px\" class=\"wp-caption aligncenter\"><a href=\"http:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2015\/03\/150317_CAT.png\"><img loading=\"lazy\" decoding=\"async\" src=\"http:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2015\/03\/150317_CAT.png\" alt=\"Caterpillar, Inc. (CAT) is confirming my need to stay bearish as it retests an intraday low from July, 2012\" width=\"550\" height=\"375\" class=\"size-full wp-image-27554\" srcset=\"https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2015\/03\/150317_CAT.png 550w, https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2015\/03\/150317_CAT-300x205.png 300w\" sizes=\"auto, (max-width: 550px) 100vw, 550px\" \/><\/a><figcaption id=\"caption-attachment-27554\" class=\"wp-caption-text\">Caterpillar, Inc. (CAT) is confirming my need to stay bearish as it retests an intraday low from July, 2012<\/figcaption><\/figure><\/p>\n<figure id=\"attachment_27555\" aria-describedby=\"caption-attachment-27555\" style=\"width: 540px\" class=\"wp-caption aligncenter\"><a href=\"http:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2015\/03\/150317_CYBR.png\"><img loading=\"lazy\" decoding=\"async\" src=\"http:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2015\/03\/150317_CYBR.png\" alt=\"CyberArk Software, Ltd. (CYBR) has essentially tested its 50DMA and looks ready to resume its earlier momentum\" width=\"550\" height=\"375\" class=\"size-full wp-image-27555\" srcset=\"https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2015\/03\/150317_CYBR.png 550w, https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2015\/03\/150317_CYBR-300x205.png 300w\" sizes=\"auto, (max-width: 550px) 100vw, 550px\" \/><\/a><figcaption id=\"caption-attachment-27555\" class=\"wp-caption-text\">CyberArk Software, Ltd. (CYBR) has essentially tested its 50DMA and looks ready to resume its earlier momentum<\/figcaption><\/figure>\n<figure id=\"attachment_27556\" aria-describedby=\"caption-attachment-27556\" style=\"width: 540px\" class=\"wp-caption aligncenter\"><a href=\"http:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2015\/03\/150317_EWG.png\"><img loading=\"lazy\" decoding=\"async\" src=\"http:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2015\/03\/150317_EWG.png\" alt=\"iShares MSCI Germany (EWG) has taken the bumpy ride to a 200DMA breakout\" width=\"550\" height=\"375\" class=\"size-full wp-image-27556\" srcset=\"https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2015\/03\/150317_EWG.png 550w, https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2015\/03\/150317_EWG-300x205.png 300w\" sizes=\"auto, (max-width: 550px) 100vw, 550px\" \/><\/a><figcaption id=\"caption-attachment-27556\" class=\"wp-caption-text\">iShares MSCI Germany (EWG) has taken the bumpy ride to a 200DMA breakout<\/figcaption><\/figure>\n<figure id=\"attachment_27557\" aria-describedby=\"caption-attachment-27557\" style=\"width: 540px\" class=\"wp-caption aligncenter\"><a href=\"http:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2015\/03\/150317_NFLX.png\"><img loading=\"lazy\" decoding=\"async\" src=\"http:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2015\/03\/150317_NFLX.png\" alt=\"Netflix (NFLX) has suddenly lost its mojo - a gap fill underway?\" width=\"550\" height=\"375\" class=\"size-full wp-image-27557\" srcset=\"https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2015\/03\/150317_NFLX.png 550w, https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2015\/03\/150317_NFLX-300x205.png 300w\" sizes=\"auto, (max-width: 550px) 100vw, 550px\" \/><\/a><figcaption id=\"caption-attachment-27557\" class=\"wp-caption-text\">Netflix (NFLX) has suddenly lost its mojo &#8211; a gap fill underway?<\/figcaption><\/figure>\n<p><figure id=\"attachment_27558\" aria-describedby=\"caption-attachment-27558\" style=\"width: 540px\" class=\"wp-caption aligncenter\"><a href=\"http:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2015\/03\/150317_ONDK.png\"><img loading=\"lazy\" decoding=\"async\" src=\"http:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2015\/03\/150317_ONDK.png\" alt=\"On Deck Capital, Inc. (ONDK) has swung wildly from a post-earnings pop, to fade and reversal and loss, to post-earnings closing high\" width=\"550\" height=\"375\" class=\"size-full wp-image-27558\" srcset=\"https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2015\/03\/150317_ONDK.png 550w, https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2015\/03\/150317_ONDK-300x205.png 300w\" sizes=\"auto, (max-width: 550px) 100vw, 550px\" \/><\/a><figcaption id=\"caption-attachment-27558\" class=\"wp-caption-text\">On Deck Capital, Inc. (ONDK) has swung wildly from a post-earnings pop, to fade and reversal and loss, to post-earnings closing high<\/figcaption><\/figure><br \/>\n<\/center><\/p>\n<p><center><br \/>\n<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%)<br \/>\n<\/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\" 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: long EWG call options, short NFLX and long NFLX calls, long EEM puts, long SSO puts, long UVXY 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 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 (March 17, 2015) &#8211; A Surprising Calm\" class=\"read-more\" href=\"https:\/\/drduru.com\/onetwentytwo\/2015\/03\/17\/t2108-update-150317\/\">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":[548,387,219,43,599,1311,62],"tags":[64,63,1518,1519,735,1517,404,405,1521,1520,65,446,226,1597,1092],"class_list":["post-27552","post","type-post","status-publish","format-standard","hentry","category-financials","category-germany","category-high-tech","category-industrial-sector","category-internet","category-software","category-technical-analysis","tag-cat","tag-caterpillar-inc","tag-cyberark-software","tag-cybr","tag-ewg","tag-ishares-msci-germany","tag-netflix","tag-nflx","tag-on-deck-capital","tag-ondk","tag-sp-500","tag-sso","tag-t2108","tag-technical-analysis","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 (March 17, 2015) - A Surprising Calm - 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\/2015\/03\/17\/t2108-update-150317\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"T2108 Update (March 17, 2015) - A Surprising Calm - 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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