{"id":31008,"date":"2015-10-05T22:39:29","date_gmt":"2015-10-06T05:39:29","guid":{"rendered":"http:\/\/drduru.com\/onetwentytwo\/?p=31008"},"modified":"2015-10-05T23:18:22","modified_gmt":"2015-10-06T06:18:22","slug":"t2108-update-151005","status":"publish","type":"post","link":"https:\/\/drduru.com\/onetwentytwo\/2015\/10\/05\/t2108-update-151005\/","title":{"rendered":"T2108 Update (October 5, 2015) – A Lot Left to Prove As Stock Market Prints A Strong Follow-Through Day"},"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 occasionally posted on twitter using the #120trade hashtag<\/a>. T2107 measures the percentage of stocks trading above their respective 200DMAs)<\/p>\n

T2108 Status<\/strong>: 44.8%
\nT2107 Status<\/strong>: 24.5%
\nVIX Status<\/strong>: 19.5
\nGeneral (Short-term) Trading Call<\/strong>: Bullish (upside target of 1996 on the S&P 500 before overbought conditions finally occur again. See “From the Edge of A Breakout to the Ledge of A Breakdown<\/a>” for more details).
\nActive T2108 periods<\/strong>: Day #2 over 20%, Day #1 over 30% (ends 12 days under 30%), Day #1 over 40% (ends 33 days under 40%)(underperiod), #94 under 50%, Day #111 under 60%, Day #316 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).
\nIBB<\/a> (iShares Nasdaq Biotechnology).<\/p>\n

Commentary<\/strong>
\nThe S&P 500 (SPY) printed a near picture-perfect follow-through to the end of the last oversold period<\/a>. The index gapped up and just ripped higher for the rest of the day. The move pinned bears, who were too greedy to release their grips on positions during the oversold period, into a world of hurt.<\/p>\n


\n
\"The<\/a>
The S&P 500 (SPY) soars back to the 1987 pivot point with downtrending 50DMA resistance looming overhead<\/figcaption><\/figure>
\n<\/center><\/p>\n

Accordingly, T2108 surged. My favorite technical indicator gained a whopping 63% to end the day at 44.8%. This move put an end to the primary downtrend defined by the 50DMA.<\/p>\n


\n
\"T2108<\/a>
T2108 has now cleared ALL the angst in place since July.<\/figcaption><\/figure>
\n<\/center><\/p>\n

The volatility index, the VIX, looks ready to reverse all the angst of the past few months just as T2108 has done already.<\/p>\n


\n
\"The<\/a>
The VIX closes below its 50DMA in a move that looks like a resumption of the previous downtrend from the flash crash high<\/figcaption><\/figure>
\n<\/center><\/p>\n

The volatility on oil is also beating a retreat. The CBOE Crude Oil Volatility Index (OVX) has confirmed the blow-off top from a month ago with a confirmed breakdown from 50 and 200DMA support. This decline has put my anti-volatility, rangebound bet on United States Oil<\/a> (USO) into the green.<\/p>\n


\n
\"The<\/a>
The CBOE Crude Oil Volatility Index (OVX) is calming down again<\/figcaption><\/figure><\/p>\n

\"After<\/a>
After a sharp bounce from all-time lows, the United States Oil ETF (USO) seems to be settling into a trading for now<\/figcaption><\/figure>
\n<\/center><\/p>\n

Big cap tech is back in effect. Amazon.com (AMZN) clocked its second highest close ever and Netflix (NFLX) finally broke through 50DMA resistance. I remain bullish on AMZN, but I am going to wait and see before I change my standing bearish technical opinion on NFLX.<\/p>\n


\n
\"Amazon.com<\/a>
Amazon.com (AMZN) has remained relatively resilient through these months of angst even after the “gap and crap” from its last earnings release.<\/figcaption><\/figure><\/p>\n

\"Netflix<\/a>
Netflix (NFLX) breaks out from 50DMA resistance and makes a strong bid to reverse its bearish technical position.<\/figcaption><\/figure>
\n<\/center><\/p>\n

It seems like a time to jump for joy and celebrate. However, there are a number of important caveats to keep in focus. These points should at least slow down anyone who is late to this rebound because they chose to sit in fear rather than buy in the oversold period(s).<\/p>\n