{"id":33015,"date":"2016-02-07T22:50:07","date_gmt":"2016-02-08T06:50:07","guid":{"rendered":"http:\/\/drduru.com\/onetwentytwo\/?p=33015"},"modified":"2016-02-07T22:50:07","modified_gmt":"2016-02-08T06:50:07","slug":"t2108-update-160205","status":"publish","type":"post","link":"https:\/\/drduru.com\/onetwentytwo\/2016\/02\/07\/t2108-update-160205\/","title":{"rendered":"T2108 Update (February 5, 2016) – The Fallen Ones"},"content":{"rendered":"

(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>: 26.8%
\nT2107 Status<\/strong>: 16.2%
\nVIX Status<\/strong>: 23.4
\nGeneral (Short-term) Trading Call<\/strong>: bullish
\nActive T2108 periods<\/strong>: Day #6 over 20% (overperiod), Day #24 under 30% (underperiod), Day #40 under 40%, Day #44 below 50%, Day #59 under 60%, Day #400 under 70%<\/p>\n

Commentary<\/strong>
\nThe bad news is that tech stocks and growth stocks in general got crushed on Friday, February 5, 2016. The good news is that T2108, the percentage of stocks trading above their respective 40-day moving averages (DMAs), hung in there for the day and barely reflected the carnage in tech. In other words, the broader market has not yet broken down like tech stocks have in the past week. In between the good and the bad news hangs my prediction and expectation that the S&P 500 (SPY) will hit resistance at its overhead 50DMA before dropping into oversold conditions yet again. That prediction is looking a little more precarious.<\/p>\n


\n
\"Incredibly,<\/a>
Incredibly, the NASDAQ (QQQ) has made a new 16-month closing low even though T2108 did not tumble into oversold territory<\/figcaption><\/figure><\/p>\n
\"T2108<\/a>
T2108 fell but is still in a small uptrend from its recent historic lows.<\/figcaption><\/figure>\n

\"The<\/a>
The S&P 500 is marginally better off than the NASDAQ. The S&P 500 made its third lowest close since pulling out of the January bottom.<\/figcaption><\/figure>
\n<\/center><\/p>\n

The relative resilience of T2108 suggests that the broader market is still hanging in there even as the (former) leaders of the indices are stumbling. And my are they stumbling. They are becoming the new fallen ones. Facebook (FB) is doing its best to drop from “full bull<\/a>” status with three days of high-volume selling that has reversed all its incremental post-earnings gains. FB now faces a critical retest of 50DMA support.<\/p>\n


\n
\"Is<\/a>
Is the full bull celebration coming to a rapid conclusion for Facebook?<\/figcaption><\/figure>
\n<\/center><\/p>\n

Google (GOOG)? Forget about it. Not only did GOOG quickly erase ALL its post-earnings gains that sent the stock to a fresh all-time high, but also it sliced through 50DMA support like butter. With a fresh closing low for 2016, GOOG is once again on the edge of filling the post-earnings gap up from October. Support at its 200DMA is also in play. I placed a limit order on Friday that got filled near the close….{gulp}.<\/p>\n


\n
\"The<\/a>
The market has forgotten all about Google’s (GOOG’s) earnings in a flash.<\/figcaption><\/figure>
\n<\/center><\/p>\n

I have not posted about Tesla (TSLA) since I pointed out the very bearish 50DMA breakdown early in January<\/a>. I also dared not trade TSLA from the bearish side because I assumed it would be one of the first stocks to enjoy a sharp relief rally whenever the market popped out of its funk. Instead, TSLA has traded nearly straight down ever since and is now at a 2-year low. TSLA is no longer teflon and could even be losing its cult-like appeal. Earnings on February 10th after-market should provide a key tell for residual commitment to TSLA.<\/p>\n


\n
\"Tesla<\/a>
Tesla (TSLA) is clearly losing favor with speculators and momentum types.<\/figcaption><\/figure>
\n<\/center><\/p>\n

There were two significant earnings-related collapses that completely blew me away. These ring out like loud alarm bells for all growth and other (former) momentum-type stocks. LinkedIn (LNKD), a former trading favorite of mine, dropped a gut-wrenching 43%. Tableau (DATA), a stock I assumed would be on the mend after its next earnings report, collapsed a whopping 49%. These types of massive one-day drops of well-known names with good, solid businesses are extremely<\/strong> rare. So, they have my attention big-time.<\/p>\n

As readers know, I like buying stocks which drpo well below lower-Bollinger Bands (BBs). THESE drops were no-brainers to try. I was able to flip LNKD call options for a day trade, and I still have the stock on my buy list for swing trades this week. I also want to believe that over the longer-haul LinkedIn is just fine.<\/p>\n

I was not as fortunate with DATA. First of all, I had a pre-earnings call spread going that completely blew up on me. Ironically, I preferred to buy shares and put options as a hedge, but I thought the put options were too expensive. Silly me! My hedged bullish position would have turned into huge profits with this kind of decline. Post-earnings, I bought shares rather than call options, but DATA lost a little more going into the close.<\/p>\n


\n
\"LinkedIn<\/a>
LinkedIn (LNKD) collapses and sellers keep up the pressure almost all day. Trading volume was 29x the 3-month average!!!!<\/figcaption><\/figure><\/p>\n
\"The<\/a>
The weekly chart for LinkedIn (LNKD) shows a 3-year low that could eventually turn into something much worse.<\/figcaption><\/figure>\n
\n

@BullBear_DD<\/a> @nitehawk<\/a> @TraderMike<\/a> – so I assume poor EPS guide and OK rev guide means slash (expensive) prices to push volume? $DATA<\/a><\/p>\n

— Duru A (@DrDuru) Feb. 4 at 02:19 PM<\/a><\/p><\/blockquote>\n