{"id":34534,"date":"2016-05-25T01:57:05","date_gmt":"2016-05-25T08:57:05","guid":{"rendered":"http:\/\/drduru.com\/onetwentytwo\/?p=34534"},"modified":"2016-05-25T01:57:05","modified_gmt":"2016-05-25T08:57:05","slug":"t2108-update-160524","status":"publish","type":"post","link":"https:\/\/drduru.com\/onetwentytwo\/2016\/05\/25\/t2108-update-160524\/","title":{"rendered":"T2108 Update (May 24, 2016) &#8211; Bears and Sellers Stand Down"},"content":{"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 <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>: 56.0%<br \/>\n<strong>T2107 Status<\/strong>: 59.5%<br \/>\n<strong>VIX Status<\/strong>: 14.4<br \/>\n<strong>General (Short-term) Trading Call<\/strong>: neutral<br \/>\n<strong>Active T2108 periods<\/strong>: Day #71 over 20%, Day #70 over 30%, Day #67 over 40%, Day #1 over 50% (ending 5 days under 50%) (overperiod), Day #9 under 60% (underperiod), Day #16 under 70%<\/p>\n<p><strong>Commentary<\/strong><br \/>\nJust like that, sellers melted away from the market and the bulls ran wild. The buyers and bulls have forced bears and sellers to stand down.<\/p>\n<p>In <a href=\"http:\/\/drduru.com\/onetwentytwo\/2016\/05\/22\/t2108-update-160520\/\" target=\"_blank\">the last T2108 Update<\/a>, I stayed cautiously bearish as the major indices remained in a chopfest under key 50-day moving average resistances. Today, May 24, 2016, that resistance melted away simultaneously as the S&#038;P 500 (SPY) and the NASDAQ (QQQ) punched through resistance and re-entered bullish territory.<\/p>\n<p><center><br \/>\n<figure id=\"attachment_34536\" aria-describedby=\"caption-attachment-34536\" style=\"width: 540px\" class=\"wp-caption alignnone\"><a href=\"http:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2016\/05\/160524_SP500.png\"><img loading=\"lazy\" decoding=\"async\" src=\"http:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2016\/05\/160524_SP500.png\" alt=\"The S&amp;P 500 (SPY) is just one follow-through day away from confirming a bullish breakout.\" width=\"550\" height=\"375\" class=\"size-full wp-image-34536\" srcset=\"https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2016\/05\/160524_SP500.png 550w, https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2016\/05\/160524_SP500-300x205.png 300w\" sizes=\"auto, (max-width: 550px) 100vw, 550px\" \/><\/a><figcaption id=\"caption-attachment-34536\" class=\"wp-caption-text\">The S&#038;P 500 (SPY) is just one follow-through day away from confirming a bullish breakout.<\/figcaption><\/figure><\/p>\n<p><figure id=\"attachment_34537\" aria-describedby=\"caption-attachment-34537\" style=\"width: 540px\" class=\"wp-caption alignnone\"><a href=\"http:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2016\/05\/160524_NASDAQ.png\"><img loading=\"lazy\" decoding=\"async\" src=\"http:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2016\/05\/160524_NASDAQ.png\" alt=\"The NASDAQ (QQQ) pulls off a breakout of dual resistance at its 50 and 200DMAs\" width=\"550\" height=\"375\" class=\"size-full wp-image-34537\" srcset=\"https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2016\/05\/160524_NASDAQ.png 550w, https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2016\/05\/160524_NASDAQ-300x205.png 300w\" sizes=\"auto, (max-width: 550px) 100vw, 550px\" \/><\/a><figcaption id=\"caption-attachment-34537\" class=\"wp-caption-text\">The NASDAQ (QQQ) pulls off a breakout of dual resistance at its 50 and 200DMAs<\/figcaption><\/figure><br \/>\n<\/center><\/p>\n<p>As my assumption of an extended &#8220;chopfest&#8221; gets challenged, this quick potential switch from a bearish to a bullish trading bias is consistent with the whiplash that a chopfest can dish out. My trading bias has moved from &#8220;cautiously bearish&#8221; to neutral to recognize the imminent switch to a bullish bias.<\/p>\n<p>T2108, the percentage of stocks trading above their respective 40DMAs, fully confirmed today&#8217;s rally. T2108 soared from 48% to 56%. T2107, the percentage of stocks trading above their respective 200DMAs, could easily hit a new high in short order given the current momentum.<\/p>\n<p>The volatility index, the VIX, receded with the bears and sellers. Once again the VIX treated the 15.35 level as a pivot.<\/p>\n<p><center><br \/>\n<figure id=\"attachment_34539\" aria-describedby=\"caption-attachment-34539\" style=\"width: 540px\" class=\"wp-caption alignnone\"><a href=\"http:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2016\/05\/160524_VIX.png\"><img loading=\"lazy\" decoding=\"async\" src=\"http:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2016\/05\/160524_VIX.png\" alt=\"The VIX looks ready to retest lows.\" width=\"550\" height=\"375\" class=\"size-full wp-image-34539\" srcset=\"https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2016\/05\/160524_VIX.png 550w, https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2016\/05\/160524_VIX-300x205.png 300w\" sizes=\"auto, (max-width: 550px) 100vw, 550px\" \/><\/a><figcaption id=\"caption-attachment-34539\" class=\"wp-caption-text\">The VIX looks ready to retest lows.<\/figcaption><\/figure><br \/>\n<\/center><\/p>\n<p>Several stocks demonstrate my changed thinking. <\/p>\n<p>Netflix (NFLX) is a stock that was poised for a big breakdown or breakout from a Bollinger Band (BB) squeeze. With my bearish bias, I assumed the top of the recent range would hold, and NFLX would hurtle quickly downward from there. I was clearly thinking too many steps ahead. NFLX has gained about 10% in just three days. It is over-stretched above its upper-Bollinger Band (BB) and faded from its high to close on its 50DMA. Normally, I would expect a pullback from here to at least the upper-BB, but this is a stock on fire with INCREASING buying volume. The over-stretched trend could continue a lot further with this kind of momentum.<\/p>\n<p><center><br \/>\n<figure id=\"attachment_34540\" aria-describedby=\"caption-attachment-34540\" style=\"width: 540px\" class=\"wp-caption alignnone\"><a href=\"http:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2016\/05\/150524_NFLX.png\"><img loading=\"lazy\" decoding=\"async\" src=\"http:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2016\/05\/150524_NFLX.png\" alt=\"Netflix suddenly accelerates from 0 to 60 and stretches toward a 50DMA test of resistance.\" width=\"550\" height=\"375\" class=\"size-full wp-image-34540\" srcset=\"https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2016\/05\/150524_NFLX.png 550w, https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2016\/05\/150524_NFLX-300x205.png 300w\" sizes=\"auto, (max-width: 550px) 100vw, 550px\" \/><\/a><figcaption id=\"caption-attachment-34540\" class=\"wp-caption-text\">Netflix suddenly accelerates from 0 to 60 and stretches toward a 50DMA test of resistance.<\/figcaption><\/figure><br \/>\n<\/center><\/p>\n<p>The iShares Nasdaq Biotechnology ETF (IBB) broke out above its 50DMA resistance and goes from bearish to bullish all over again. I started this month lamenting how IBB completely disappointed me by failing to deliver much follow-through to April&#8217;s (initially) impressive breakout.<\/p>\n<p><center><br \/>\n<figure id=\"attachment_34541\" aria-describedby=\"caption-attachment-34541\" style=\"width: 540px\" class=\"wp-caption alignnone\"><a href=\"http:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2016\/05\/160524_IBB.png\"><img loading=\"lazy\" decoding=\"async\" src=\"http:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2016\/05\/160524_IBB.png\" alt=\"The iShares Nasdaq Biotechnology ETF (IBB) avoided a retest of recent lows so the latest 50DMA breakout looks like a bottoming underway.\" width=\"550\" height=\"375\" class=\"size-full wp-image-34541\" srcset=\"https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2016\/05\/160524_IBB.png 550w, https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2016\/05\/160524_IBB-300x205.png 300w\" sizes=\"auto, (max-width: 550px) 100vw, 550px\" \/><\/a><figcaption id=\"caption-attachment-34541\" class=\"wp-caption-text\">The iShares Nasdaq Biotechnology ETF (IBB) avoided a retest of recent lows so the latest 50DMA breakout looks like a bottoming underway.<\/figcaption><\/figure><br \/>\n<\/center><\/p>\n<p>Qualcomm (QCOM) broke out last week above its 200DMA. The buying has accelerated and put QCOM at a new high for 2016. The stock is definitely in a bullish position.<\/p>\n<p><center><br \/>\n<figure id=\"attachment_34542\" aria-describedby=\"caption-attachment-34542\" style=\"width: 540px\" class=\"wp-caption alignnone\"><a href=\"http:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2016\/05\/160524_QCOM.png\"><img loading=\"lazy\" decoding=\"async\" src=\"http:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2016\/05\/160524_QCOM.png\" alt=\"Qualcomm (QCOM) is surging higher in convincing follow-through to last week&#039;s 200DMA breakout.\" width=\"550\" height=\"375\" class=\"size-full wp-image-34542\" srcset=\"https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2016\/05\/160524_QCOM.png 550w, https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2016\/05\/160524_QCOM-300x205.png 300w\" sizes=\"auto, (max-width: 550px) 100vw, 550px\" \/><\/a><figcaption id=\"caption-attachment-34542\" class=\"wp-caption-text\">Qualcomm (QCOM) is surging higher in convincing follow-through to last week&#8217;s 200DMA breakout.<\/figcaption><\/figure><br \/>\n<\/center><\/p>\n<p>Even home builders joined the breakout party. I wrote about the bullish implications in housing in <a href=\"http:\/\/drduru.com\/onetwentytwo\/2016\/05\/25\/housing-market-review-may-2016\/\" target=\"_blank\">my latest Housing Review for May, 2016<\/a>. <\/p>\n<p><center><br \/>\n<figure id=\"attachment_34528\" aria-describedby=\"caption-attachment-34528\" style=\"width: 540px\" class=\"wp-caption alignnone\"><a href=\"http:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2016\/05\/160524_ITB.png\"><img loading=\"lazy\" decoding=\"async\" src=\"http:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2016\/05\/160524_ITB.png\" alt=\"iShares US Home Construction (ITB) breaks out from 50 and 200-day moving average resistance on buying volume that has not been this large since the recovery from August&#039;s flash crash.\" width=\"550\" height=\"375\" class=\"size-full wp-image-34528\" srcset=\"https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2016\/05\/160524_ITB.png 550w, https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2016\/05\/160524_ITB-300x205.png 300w\" sizes=\"auto, (max-width: 550px) 100vw, 550px\" \/><\/a><figcaption id=\"caption-attachment-34528\" class=\"wp-caption-text\">iShares US Home Construction (ITB) breaks out from 50 and 200-day moving average resistance on buying volume that has not been this large since the recovery from August&#8217;s flash crash.<\/figcaption><\/figure><br \/>\n<\/center><\/p>\n<p>This is an interesting time for the market to get a fresh boost. The rally comes right on the heels of selling that was presumed to come from rate hike fears. The odds of a rate hike in July are as strong as ever but so is the market. Even if I switch back to a bullish bias, I will remain bearish on dollar-sensitive plays (excluding gold and silver) as long as Fed Fund futures project an imminent rate hike.<\/p>\n<p>&#8212; &#8211; &#8212;<\/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.hcom\/h-sc\/ui?s=$SPX&amp;p=D&amp;st=2015-11-24&amp;en=2016-05-24&amp;id=p14085208538\" target=\"_blank\">S&amp;P 500<\/a> or <a title=\"6-month chart of SPY\" href=\"http:\/\/stockcharts.com\/h-sc\/ui?s=SPY&amp;p=D&amp;st=2015-11-24&amp;en=2016-05-24&amp;id=p14085208538\" target=\"_blank\">SPY<\/a><br \/>\n<a title=\"6-month chart of the U.S. dollar\" href=\"http:\/\/stockcharts.com\/h-sc\/ui?s=$USD&amp;p=D&amp;st=2015-11-24&amp;en=2016-05-24&amp;id=p25615696567\" target=\"_blank\">U.S. Dollar Index<\/a> (U.S. dollar)<br \/>\n<a title=\"6-month chart of EEM\" href=\"http:\/\/stockcharts.com\/h-sc\/ui?s=EEM&amp;p=D&amp;st=2015-11-24&amp;en=2016-05-24&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=2015-11-24&amp;en=2016-05-24&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=2015-11-24&amp;en=2016-05-24&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=2015-11-24&amp;en=2016-05-24&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=2015-11-24&amp;en=2016-05-24&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=2015-11-24&amp;en=2016-05-24&amp;id=p15880085697\" target=\"_blank\">IBB<\/a> (iShares Nasdaq Biotechnology).<\/p>\n<p><center><br \/>\n<strong>Daily T2108 vs the S&amp;P 500<\/strong><br \/>\n<a href=\"http:\/\/www.drduru.com\/money\/charts\/T2108-daily_s.png\"><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\" \/><\/a><\/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\" \/><\/a><br \/>\n*<strong>All charts created using <\/strong><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 UVXY call options, long SSO 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 (May 24, 2016) &#8211; Bears and Sellers Stand Down\" class=\"read-more\" href=\"https:\/\/drduru.com\/onetwentytwo\/2016\/05\/25\/t2108-update-160524\/\">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":[584,482,300,219,599,512,796,62],"tags":[1522,413,405,316,535,65,362,226,303],"class_list":["post-34534","post","type-post","status-publish","format-standard","hentry","category-bollinger-band","category-breakout","category-health-care","category-high-tech","category-internet","category-resistance","category-semiconductors","category-technical-analysis","tag-ibb","tag-nasdaq","tag-nflx","tag-qcom","tag-qqq","tag-sp-500","tag-spy","tag-t2108","tag-vix"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.4 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>T2108 Update (May 24, 2016) - Bears and Sellers Stand Down - 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\/2016\/05\/25\/t2108-update-160524\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"T2108 Update (May 24, 2016) - Bears and Sellers Stand Down - 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]. 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 ... 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