{"id":31232,"date":"2015-10-19T22:31:11","date_gmt":"2015-10-20T05:31:11","guid":{"rendered":"http:\/\/drduru.com\/onetwentytwo\/?p=31232"},"modified":"2015-10-20T10:42:07","modified_gmt":"2015-10-20T17:42:07","slug":"t2108-update-151019","status":"publish","type":"post","link":"https:\/\/drduru.com\/onetwentytwo\/2015\/10\/19\/t2108-update-151019\/","title":{"rendered":"T2108 Update (October 19, 2015) – Ending the August Angst With An Exclamation Point"},"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>: 64.9%
\nT2107 Status<\/strong>: 31.7%
\nVIX Status<\/strong>: 15.0
\nGeneral (Short-term) Trading Call<\/strong>: Neutral (target of 1996 on the S&P 500 occurred ahead of overbought conditions. See “From the Edge of A Breakout to the Ledge of A Breakdown<\/a>” for more details).
\nActive T2108 periods<\/strong>: Day #12 over 20%, Day #11 over 30%, Day #11 over 40%, Day #9 over 50%, Day #5 over 60% (overperiod), Day #326 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>
\nNot a lot of action today: the S&P 500 (SPY) and T2108 were essentially flat on the day. However, for my last T2108 oversold trade, it was a big day.<\/p>\n


\n
\"The<\/a>
The ProShares Short VIX Short-Term Futures (SVXY) finally breaks out above its 50DMA and closes at its highest point since the oversold periods began.<\/figcaption><\/figure>
\n<\/center><\/p>\n

This 7.2% gain was a sneaky move because the volatility index, the VIX, barely budged on the day. I will probably sell my SVXY shares this week.<\/p>\n


\n
\"The<\/a>
The volatility index seems setup to trend all the way back to recent lows.<\/figcaption><\/figure>
\n<\/center><\/p>\n

On the flip side, the ProShares Ultra VIX Short-Term Futures (UVXY) has ended the August Angst with an exclamation point. UVXY has now completely reversed its entire run-up from late August. UVXY is also likely to get back to familiar territory: all downhill.<\/p>\n


\n
\"ProShares<\/a>
ProShares Ultra VIX Short-Term Futures (UVXY) looks set to resume its downtrend as the August Angst ends with an exclamation point.<\/figcaption><\/figure>
\n<\/center><\/p>\n

In the last T2108 Update<\/a>, I completely forgot to note the growing buying interest in iShares Nasdaq Biotechnology (IBB).<\/p>\n


\n
\"iShares<\/a>
iShares Nasdaq Biotechnology (IBB) showing some signs of life off the recent lows.<\/figcaption><\/figure>
\n<\/center><\/p>\n

I know IBB is LONG overdue to make a run at reversing the Clinton bash, but the appearance of buying interest as shown above is a reminder to keep the eyes on the ball here.<\/p>\n

Speaking of keeping eyes on the ball, I almost missed this unfolding breakout on Baidu (BIDU)…<\/p>\n


\n
\"Baidu<\/a>
Baidu (BIDU) is finally making a move for a bullish pastures.<\/figcaption><\/figure>
\n<\/center><\/p>\n

I am SO tempted to get back into BIDU. Trading volume is picking up on the buying. However, earnings are coming next week. So, if I do make a move it will strictly be a pre-earnings trade. I will definitely be looking for an excuse from earnings to make a longer-range play.<\/p>\n

My favorite story of the day was Weight Watchers (WTW). I remember when Jennifer Hudson’s commercials made a big splash in early 2011. The stock surged. That was the LAST time things looked good for WTW. The stock maxed out about $87 that year. WTW looked ready for the ICU for over-dieting under $4 back in July. Today, it was a full course meal as WTW increased a whopping 105%.<\/p>\n


\n
\"Weight<\/a>
Weight Watchers puts on some (good) weight finally as Oprah weighs in.<\/figcaption><\/figure>
\n