{"id":31718,"date":"2015-11-15T12:13:17","date_gmt":"2015-11-15T20:13:17","guid":{"rendered":"http:\/\/drduru.com\/onetwentytwo\/?p=31718"},"modified":"2015-11-15T12:13:17","modified_gmt":"2015-11-15T20:13:17","slug":"t2108-update-151113","status":"publish","type":"post","link":"https:\/\/drduru.com\/onetwentytwo\/2015\/11\/15\/t2108-update-151113\/","title":{"rendered":"T2108 Update (November 13, 2015) &#8211; The S&#038;P 500 Faces A Key Market Test"},"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>: 38.1%<br \/>\n<strong>T2107 Status<\/strong>: 25.5%<br \/>\n<strong>VIX Status<\/strong>: 20.1<br \/>\n<strong>General (Short-term) Trading Call<\/strong>: bearish<br \/>\n<strong>Active T2108 periods<\/strong>: Day #30 over 20%, Day #29 over 30%, Day #1 under 40% (ending 28 days over 40%) (underperiod), Day #2 below 50%, Day #4 under 60%, Day #344 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=$SPX&amp;p=D&amp;st=2015-05-13&amp;en=2015-11-13&amp;id=p14085208538\" target=\"_blank\">S&amp;P 500<\/a> or <a title=\"6-month chart of SPY\" href=\"http:\/\/stockcharts.com\/h-sc\/ui?s=SPY&amp;p=D&amp;st=2015-05-13&amp;en=2015-11-13&amp;id=p14085208538\" target=\"_blank\">SPY<\/a><br \/>\n<a title=\"6-month chart of SDS\" href=\"http:\/\/stockcharts.com\/h-sc\/ui?s=SDS&amp;p=D&amp;st=2015-05-13&amp;en=2015-11-13&amp;id=p15880085697\" target=\"_blank\">SDS<\/a> (ProShares UltraShort S&amp;P500)<br \/>\n<a title=\"6-month chart of the U.S. dollar\" href=\"http:\/\/stockcharts.com\/h-sc\/ui?s=$USD&amp;p=D&amp;st=2015-05-13&amp;en=2015-11-13&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=2015-05-13&amp;en=2015-11-13&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=2015-05-13&amp;en=2015-11-13&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=2015-05-13&amp;en=2015-11-13&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=2015-05-13&amp;en=2015-11-13&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=2015-05-13&amp;en=2015-11-13&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=2015-05-13&amp;en=2015-11-13&amp;id=p15880085697\" target=\"_blank\">IBB<\/a> (iShares Nasdaq Biotechnology).<\/p>\n<p><strong>Commentary<\/strong><br \/>\nI am keeping this update short given the tragic terrorist attack in Paris Friday night, November 13th. It is very possible that the nature and tenor of trading change as a result. I visited Paris for the first time last year. Although it was a quick day trip in the middle of a layover, I thoroughly enjoyed myself and still look forward to visiting again one day soon. My prayers go out to everyone impacted by this atrocity.<\/p>\n<p><center><br \/>\n<a href=\"https:\/\/twitter.com\/search?q=%23Prayers4Paris&#038;src=tyah\"><br \/>\n<a href=\"http:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2015\/11\/151113_FrenchFlag.png\"><img loading=\"lazy\" decoding=\"async\" src=\"http:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2015\/11\/151113_FrenchFlag.png\" alt=\"\" width=\"550\" height=\"110\" class=\"alignnone size-full wp-image-31731\" srcset=\"https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2015\/11\/151113_FrenchFlag.png 550w, https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2015\/11\/151113_FrenchFlag-300x60.png 300w\" sizes=\"auto, (max-width: 550px) 100vw, 550px\" \/><\/a><\/a><br \/>\n<\/center><\/p>\n<p>The S&#038;P 500 (SPY) lost 1.1% on the day, and finished the week with a 3.6% loss. It was a week the began ominously; the selling validated <a href=\"http:\/\/drduru.com\/onetwentytwo\/2015\/11\/09\/t2108-update-151106\/\" target=\"_blank\">the alarm bells I rang to start the week<\/a>. <\/p>\n<p><center><br \/>\n<figure id=\"attachment_31719\" aria-describedby=\"caption-attachment-31719\" style=\"width: 540px\" class=\"wp-caption alignnone\"><a href=\"http:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2015\/11\/151113_SP500.png\"><img loading=\"lazy\" decoding=\"async\" src=\"http:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2015\/11\/151113_SP500.png\" alt=\"An important test of support at the 50-day moving average (DMA) looms for the S&amp;P 500.\" width=\"550\" height=\"375\" class=\"size-full wp-image-31719\" srcset=\"https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2015\/11\/151113_SP500.png 550w, https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2015\/11\/151113_SP500-300x205.png 300w\" sizes=\"auto, (max-width: 550px) 100vw, 550px\" \/><\/a><figcaption id=\"caption-attachment-31719\" class=\"wp-caption-text\">An important test of support at the 50-day moving average (DMA) looms for the S&#038;P 500.<\/figcaption><\/figure><br \/>\n<\/center><\/p>\n<p>The 50-day moving average (DMA) is trending upward, so a test of this support is very critical for the S&#038;P 500. The potential test comes with T2108 plunging from 61.7% to start the week to 38.1% to close the week. <\/p>\n<p><center><br \/>\n<figure id=\"attachment_31720\" aria-describedby=\"caption-attachment-31720\" style=\"width: 540px\" class=\"wp-caption alignnone\"><a href=\"http:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2015\/11\/151113_T2108.png\"><img loading=\"lazy\" decoding=\"async\" src=\"http:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2015\/11\/151113_T2108.png\" alt=\"T2108 plunges out of the trading range that defined its behavior for a month just below overbought status.\" width=\"550\" height=\"375\" class=\"size-full wp-image-31720\" srcset=\"https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2015\/11\/151113_T2108.png 550w, https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2015\/11\/151113_T2108-300x205.png 300w\" sizes=\"auto, (max-width: 550px) 100vw, 550px\" \/><\/a><figcaption id=\"caption-attachment-31720\" class=\"wp-caption-text\">T2108 plunges out of the trading range that defined its behavior for a month just below overbought status.<\/figcaption><\/figure><br \/>\n<\/center><\/p>\n<p>Once T2108 drops into the 30s, I start to think about oversold trading conditions. In recent years, the low 30s have served as &#8220;close enough&#8221; to trigger a (short-term) bottom in the trading action. In this case, I am more interested in fading volatility than playing the S&#038;P 500. I strongly suspect that any bounce in the S&#038;P 500 will be short-lived and capped by its 200DMA. The volatility index, the VIX, is reaching &#8220;elevated&#8221; status at 20.1. I would target a return to the 15.35 pivot on a fade and make the trade a quick flip on shares of ProShares Short VIX Short-Term Futures (SVXY).<\/p>\n<p><center><br \/>\n<figure id=\"attachment_31722\" aria-describedby=\"caption-attachment-31722\" style=\"width: 540px\" class=\"wp-caption alignnone\"><a href=\"http:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2015\/11\/151113_VIX.png\"><img loading=\"lazy\" decoding=\"async\" src=\"http:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2015\/11\/151113_VIX.png\" alt=\"The volatility index is making a move\" width=\"550\" height=\"375\" class=\"size-full wp-image-31722\" srcset=\"https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2015\/11\/151113_VIX.png 550w, https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2015\/11\/151113_VIX-300x205.png 300w\" sizes=\"auto, (max-width: 550px) 100vw, 550px\" \/><\/a><figcaption id=\"caption-attachment-31722\" class=\"wp-caption-text\">The volatility index is making a move<\/figcaption><\/figure><br \/>\n<\/center><\/p>\n<p>For trading, I unloaded a lot of put options Thursday and Friday. These were positions primarily on stocks I featured in various charts during the week. I was glad to have them convert so quickly. I dabbled i some call options on select positions.<\/p>\n<p>One small sign that things could soon turn for the buyers and bulls is Caterpillar (CAT). It made a very bearish breakdown with a gap down below its 50DMA on Thursday, but on Friday the stock showed very surprising relative strength. CAT managed to rally while most of the market was selling off.<\/p>\n<p><center><br \/>\n<figure id=\"attachment_31723\" aria-describedby=\"caption-attachment-31723\" style=\"width: 540px\" class=\"wp-caption alignnone\"><a href=\"http:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2015\/11\/151113_CAT.png\"><img loading=\"lazy\" decoding=\"async\" src=\"http:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2015\/11\/151113_CAT.png\" alt=\"Caterpillar (CAT) manages a surprising bounce the day after a very bearish breakdown\" width=\"550\" height=\"375\" class=\"size-full wp-image-31723\" srcset=\"https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2015\/11\/151113_CAT.png 550w, https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2015\/11\/151113_CAT-300x205.png 300w\" sizes=\"auto, (max-width: 550px) 100vw, 550px\" \/><\/a><figcaption id=\"caption-attachment-31723\" class=\"wp-caption-text\">Caterpillar (CAT) manages a surprising bounce the day after a very bearish breakdown<\/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: short CAT<\/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 (November 13, 2015) &#8211; The S&#038;P 500 Faces A Key Market Test\" class=\"read-more\" href=\"https:\/\/drduru.com\/onetwentytwo\/2015\/11\/15\/t2108-update-151113\/\">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":[483,43,511,62],"tags":[64,63,65,226,1597],"class_list":["post-31718","post","type-post","status-publish","format-standard","hentry","category-breakdown","category-industrial-sector","category-support","category-technical-analysis","tag-cat","tag-caterpillar-inc","tag-sp-500","tag-t2108","tag-technical-analysis"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.4 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>T2108 Update (November 13, 2015) - The S&amp;P 500 Faces A Key Market Test - 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\/11\/15\/t2108-update-151113\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"T2108 Update (November 13, 2015) - The S&amp;P 500 Faces A Key Market Test - 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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