{"id":5060,"date":"2011-05-17T20:19:32","date_gmt":"2011-05-18T00:19:32","guid":{"rendered":"http:\/\/drduru.com\/onetwentytwo\/?p=5060"},"modified":"2011-05-18T00:46:47","modified_gmt":"2011-05-18T04:46:47","slug":"t2108-update-110517","status":"publish","type":"post","link":"https:\/\/drduru.com\/onetwentytwo\/2011\/05\/17\/t2108-update-110517\/","title":{"rendered":"T2108 Update: May 17, 2011"},"content":{"rendered":"

(T2108 measures the percentage of stocks trading above their respective 40-day moving averages [DMAs]. To learn more about it, see my T2108 Resource Page<\/a>.)<\/p>\n

T2108 Status<\/strong>: 46% and Neutral
\nGeneral Trading Call<\/strong>: Cover some shorts.<\/p>\n

Commentary<\/strong>
\nT2108 is just below April’s low of 47%. Given the S&P 500 is straddling critical support at the 50DMA (see below), I strongly suspect bulls are salivating to pick up some goods. This observation is behind my caution to cover a few shorts.<\/p>\n


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\"S&P<\/a>
S&P 500 closes with a hammer just above critical support at the 50DMA<\/figcaption><\/figure>
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I cannot include “buy a few longs” in my trading call because the S&P 500 is still locked in a steep downtrend from the May multi-year highs. Any new trading longs may be good for a day or two at the most. In fact, I would suggest unloading longs into any subsequent bounce. I am expecting a break of today’s lows to lead to a rapid retest of April’s lows on the S&P 500 and a near oversold reading on T2108.<\/p>\n

Once T2108 gets below 40% (my current expectation for this cycle), I will feel more confident about executing trading longs.<\/p>\n

In this edition of Yahoo Finance’s Breakout, Jeff Macke pulls out his famous purple crayon to draw trendlines explaining his conclusion that rallies must be sold<\/a>:<\/p>\n

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Macke’s Summary:<\/strong><\/p>\n