{"id":31195,"date":"2015-10-18T20:03:50","date_gmt":"2015-10-19T03:03:50","guid":{"rendered":"http:\/\/drduru.com\/onetwentytwo\/?p=31195"},"modified":"2015-10-18T20:06:08","modified_gmt":"2015-10-19T03:06:08","slug":"t2108-update-151016","status":"publish","type":"post","link":"https:\/\/drduru.com\/onetwentytwo\/2015\/10\/18\/t2108-update-151016\/","title":{"rendered":"T2108 Update (October 16, 2015) &#8211; Surprising Divergence Marks the End of the August Angst"},"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>: 65.4%<br \/>\n<strong>T2107 Status<\/strong>: 30.9%<br \/>\n<strong>VIX Status<\/strong>: 15.1<br \/>\n<strong>General (Short-term) Trading Call<\/strong>: Neutral (target of 1996 on the S&#038;P 500 occurred ahead of overbought conditions. See &#8220;<a href=\"http:\/\/drduru.com\/onetwentytwo\/2015\/09\/18\/t2108-update-150918\/\" target=\"_blank\">From the Edge of A Breakout to the Ledge of A Breakdown<\/a>&#8221; for more details).<br \/>\n<strong>Active T2108 periods<\/strong>: Day #11 over 20%, Day #10 over 30%, Day #10 over 40%, Day #8 over 50%, Day #4 over 60% (overperiod), Day #325 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=$SPX&amp;p=D&amp;st=2015-04-16&amp;en=2015-10-16&amp;id=p14085208538\" target=\"_blank\">S&amp;P 500<\/a> or <a title=\"6-month chart of SPY\" href=\"http:\/\/stockcharts.com\/h-sc\/ui?s=SPY&amp;p=D&amp;st=2015-04-16&amp;en=2015-10-16&amp;id=p14085208538\" target=\"_blank\">SPY<\/a><br \/>\n<a title=\"6-month chart of SDS\" href=\"http:\/\/stockcharts.com\/h-sc\/ui?s=SDS&amp;p=D&amp;st=2015-04-16&amp;en=2015-10-16&amp;id=p15880085697\" target=\"_blank\">SDS<\/a> (ProShares UltraShort S&amp;P500)<br \/>\n<a title=\"6-month chart of the U.S. dollar\" href=\"http:\/\/stockcharts.com\/h-sc\/ui?s=$USD&amp;p=D&amp;st=2015-04-16&amp;en=2015-10-16&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=2015-04-16&amp;en=2015-10-16&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=2015-04-16&amp;en=2015-10-16&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=2015-04-16&amp;en=2015-10-16&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=2015-04-16&amp;en=2015-10-16&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=2015-04-16&amp;en=2015-10-16&amp;id=p15880085697\" target=\"_blank\">CAT<\/a> (Caterpillar).<br \/>\n<a title=\"6-month chart of IBB\" href=\"http:\/\/stockcharts.com\/h-sc\/ui?s=IBB&amp;p=D&amp;st=2015-04-16&amp;en=2015-10-16&amp;id=p15880085697\" target=\"_blank\">IBB<\/a> (iShares Nasdaq Biotechnology).<\/p>\n<p><strong>Commentary<\/strong><br \/>\nThe S&#038;P 500 (SPY) made a small breakout on Friday, October 16th. With a close of 2033.11, the index sits almost exactly where it sat the day before the first oversold period began during the August angst.<\/p>\n<p><center><br \/>\n<figure id=\"attachment_31196\" aria-describedby=\"caption-attachment-31196\" style=\"width: 540px\" class=\"wp-caption alignnone\"><a href=\"http:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2015\/10\/151016_SP500.png\"><img loading=\"lazy\" decoding=\"async\" src=\"http:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2015\/10\/151016_SP500.png\" alt=\"The S&amp;P 500 breaks out ever so slightly to finish a complete reversal of the all the previous oversold periods.\" width=\"550\" height=\"375\" class=\"size-full wp-image-31196\" srcset=\"https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2015\/10\/151016_SP500.png 550w, https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2015\/10\/151016_SP500-300x205.png 300w\" sizes=\"auto, (max-width: 550px) 100vw, 550px\" \/><\/a><figcaption id=\"caption-attachment-31196\" class=\"wp-caption-text\">The S&#038;P 500 breaks out ever so slightly to finish a complete reversal of the all the previous oversold periods.<\/figcaption><\/figure><br \/>\n<\/center><\/p>\n<p>The volatility index, the VIX, reinforces the potential importance of this move. The VIX gapped down right above the 15.35 pivot and eventually closed right below it. This move marks and confirms the END of the August angst. <\/p>\n<p><center><br \/>\n<figure id=\"attachment_31197\" aria-describedby=\"caption-attachment-31197\" style=\"width: 540px\" class=\"wp-caption alignnone\"><a href=\"http:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2015\/10\/151016_VIX.png\"><img loading=\"lazy\" decoding=\"async\" src=\"http:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2015\/10\/151016_VIX.png\" alt=\"The VIX is back into the &quot;all is well&quot; zone - below the 15.35 pivot line.\" width=\"550\" height=\"375\" class=\"size-full wp-image-31197\" srcset=\"https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2015\/10\/151016_VIX.png 550w, https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2015\/10\/151016_VIX-300x205.png 300w\" sizes=\"auto, (max-width: 550px) 100vw, 550px\" \/><\/a><figcaption id=\"caption-attachment-31197\" class=\"wp-caption-text\">The VIX is back into the &#8220;all is well&#8221; zone &#8211; below the 15.35 pivot line.<\/figcaption><\/figure><br \/>\n<\/center><\/p>\n<p>The NASDAQ (QQQ) is still lagging as it has not yet broken the intraday high from September. However, it HAS broken through its downtrending 50DMA &#8211; a bullish sign.<\/p>\n<p><center><br \/>\n<figure id=\"attachment_31199\" aria-describedby=\"caption-attachment-31199\" style=\"width: 540px\" class=\"wp-caption alignnone\"><a href=\"http:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2015\/10\/151016_NASDAQ.png\"><img loading=\"lazy\" decoding=\"async\" src=\"http:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2015\/10\/151016_NASDAQ.png\" alt=\"The NASDAQ has confirmed a 50DMA berakout but has yet to make a new (intraday) high in this post oversold period\" width=\"550\" height=\"375\" class=\"size-full wp-image-31199\" srcset=\"https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2015\/10\/151016_NASDAQ.png 550w, https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2015\/10\/151016_NASDAQ-300x205.png 300w\" sizes=\"auto, (max-width: 550px) 100vw, 550px\" \/><\/a><figcaption id=\"caption-attachment-31199\" class=\"wp-caption-text\">The NASDAQ has confirmed a 50DMA berakout but has yet to make a new (intraday) high in this post oversold period<\/figcaption><\/figure><br \/>\n<\/center><\/p>\n<p>Despite the good signs, T2108 did not follow the market higher. In fact, I daresay my favorite technical indicator SHOULD have hit overbought territory. Instead, T2108 retreated ever so slightly to 65.4%. <\/p>\n<p>So, overall, the oversold trades have worked out exceptionally well given the complete reversal of the August angst. My remaining position consists of shares of ProShares Short VIX Short-Term Futures (SVXY). Upside potential still exists with a retest by the S&#038;P 500 of its now downtrending 200DMA resistance. Such a test SHOULD occur with T2108 hitting overbought conditions. The current short-term trading call remains neutral, and I anticipate it going to bearish once T2108 flips overbought. HOWEVER, if the S&#038;P 500 manages to confirm a 200DMA breakout, I will quickly revise my trading assessment as needed. Again, I will take this one step at a time. There is still plenty of time on the clock for the third quarter earnings season.<\/p>\n<p>As a final check, here is the Australian dollar (FXA) versus the Japanese yen (FXY). AUD\/JPY is still comfortably above its 50DMA. It confirms the bullish bias in the market right now.<\/p>\n<p><center><br \/>\n<figure id=\"attachment_31200\" aria-describedby=\"caption-attachment-31200\" style=\"width: 540px\" class=\"wp-caption alignnone\"><a href=\"http:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2015\/10\/151016_AUDJPY.png\"><img loading=\"lazy\" decoding=\"async\" src=\"http:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2015\/10\/151016_AUDJPY.png\" alt=\"The Australian dollar is still in a bullish position against the Japanese yen for now.\" width=\"550\" height=\"375\" class=\"size-full wp-image-31200\" srcset=\"https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2015\/10\/151016_AUDJPY.png 550w, https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2015\/10\/151016_AUDJPY-300x205.png 300w\" sizes=\"auto, (max-width: 550px) 100vw, 550px\" \/><\/a><figcaption id=\"caption-attachment-31200\" class=\"wp-caption-text\">The Australian dollar is still in a bullish position against the Japanese yen for now.<\/figcaption><\/figure><br \/>\n<\/center><\/p>\n<p>This earnings season, I have taken particular note of stocks that experienced sharp reversals from initial losses. It is a sign that buyers are eagerly looking to buy dips and other similar buying opportunities. <a href=\"http:\/\/drduru.com\/onetwentytwo\/2015\/10\/14\/t2108-update-151014\/\" target=\"_blank\">Intel (INTC)<\/a>, Goldman Sachs (GS), and Wynn Resorts (WYNN) have experienced these kinds of quick turn-rounds although WYNN could not quite close the gap. <\/p>\n<p><center><br \/>\n<figure id=\"attachment_31202\" aria-describedby=\"caption-attachment-31202\" style=\"width: 540px\" class=\"wp-caption alignnone\"><a href=\"http:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2015\/10\/151016_GS.png\"><img loading=\"lazy\" decoding=\"async\" src=\"http:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2015\/10\/151016_GS.png\" alt=\"Goldman Sachs (GS) stages an impressive post-earnings reversal even as the overall chart still looks very bearish: 50DMA resistance is holding and the August angst still weighs heavily on the stock.\" width=\"550\" height=\"375\" class=\"size-full wp-image-31202\" srcset=\"https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2015\/10\/151016_GS.png 550w, https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2015\/10\/151016_GS-300x205.png 300w\" sizes=\"auto, (max-width: 550px) 100vw, 550px\" \/><\/a><figcaption id=\"caption-attachment-31202\" class=\"wp-caption-text\">Goldman Sachs (GS) stages an impressive post-earnings reversal even as the overall chart still looks very bearish: 50DMA resistance is holding and the August angst still weighs heavily on the stock.<\/figcaption><\/figure><\/p>\n<p><figure id=\"attachment_31203\" aria-describedby=\"caption-attachment-31203\" style=\"width: 540px\" class=\"wp-caption alignnone\"><a href=\"http:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2015\/10\/151016_WYNN.png\"><img loading=\"lazy\" decoding=\"async\" src=\"http:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2015\/10\/151016_WYNN.png\" alt=\"Wynn Resorts (WYNN) bounces sharply off its post-earnings low but fails to hold a complete gap fill. 50DMA resistance still in place. Trading volume still extremely high.\" width=\"550\" height=\"375\" class=\"size-full wp-image-31203\" srcset=\"https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2015\/10\/151016_WYNN.png 550w, https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2015\/10\/151016_WYNN-300x205.png 300w\" sizes=\"auto, (max-width: 550px) 100vw, 550px\" \/><\/a><figcaption id=\"caption-attachment-31203\" class=\"wp-caption-text\">Wynn Resorts (WYNN) bounces sharply off its post-earnings low but fails to hold a complete gap fill. 50DMA resistance still in place. Trading volume still extremely high.<\/figcaption><\/figure><br \/>\n<\/center><\/p>\n<p>On the other hand, Netflix (NFLX) lost its campaign to return to the bullish status of the tech big cap leaders. Until it can regain its composure above the 50DMA, it is back to a bearish bias for trading the stock.<\/p>\n<p><center><br \/>\n<figure id=\"attachment_31201\" aria-describedby=\"caption-attachment-31201\" style=\"width: 540px\" class=\"wp-caption alignnone\"><a href=\"http:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2015\/10\/151016_NFLX.png\"><img loading=\"lazy\" decoding=\"async\" src=\"http:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2015\/10\/151016_NFLX.png\" alt=\"Netflix (NFLX) fails to attract post-earnings buyers as yet.\" width=\"550\" height=\"375\" class=\"size-full wp-image-31201\" srcset=\"https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2015\/10\/151016_NFLX.png 550w, https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2015\/10\/151016_NFLX-300x205.png 300w\" sizes=\"auto, (max-width: 550px) 100vw, 550px\" \/><\/a><figcaption id=\"caption-attachment-31201\" class=\"wp-caption-text\">Netflix (NFLX) fails to attract post-earnings buyers as yet.<\/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><\/p>\n<p>The charts above are the my LATEST updates independent of the date of this given T2108 post. For my latest T2108 post <a href=\"http:\/\/drduru.com\/onetwentytwo\/tag\/t2108\/\" target=\"_blank\">click here<\/a>.<\/p>\n<p>\n<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 SVXY, short WYNN, long WYNN call and put options<\/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 (October 16, 2015) &#8211; Surprising Divergence Marks the End of the August Angst\" class=\"read-more\" href=\"https:\/\/drduru.com\/onetwentytwo\/2015\/10\/18\/t2108-update-151016\/\">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":[482,548,20,599,512,511,62,1633],"tags":[772,310,208,413,405,535,65,226,1597,303,931,109],"class_list":["post-31195","post","type-post","status-publish","format-standard","hentry","category-breakout","category-financials","category-forex","category-internet","category-resistance","category-support","category-technical-analysis","category-travel","tag-audjpy","tag-australian-dollar","tag-gs","tag-nasdaq","tag-nflx","tag-qqq","tag-sp-500","tag-t2108","tag-technical-analysis","tag-vix","tag-volatility-index","tag-wynn"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.4 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>T2108 Update (October 16, 2015) - Surprising Divergence Marks the End of the August Angst - 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\/10\/18\/t2108-update-151016\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"T2108 Update (October 16, 2015) - Surprising Divergence Marks the End of the August Angst - 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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