{"id":6774,"date":"2011-08-18T01:30:42","date_gmt":"2011-08-18T05:30:42","guid":{"rendered":"http:\/\/drduru.com\/onetwentytwo\/?p=6774"},"modified":"2011-08-18T01:31:04","modified_gmt":"2011-08-18T05:31:04","slug":"t2108-update-110817","status":"publish","type":"post","link":"https:\/\/drduru.com\/onetwentytwo\/2011\/08\/18\/t2108-update-110817\/","title":{"rendered":"T2108 Update – August 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>. You can follow real-time T2108 commentary<\/a> on twitter using the #T2108 hashtag.)<\/p>\n

T2108 Status<\/strong>: 19% (Day #10 of the current oversold period).
\nVIX Status<\/strong>: 32
\nGeneral (Short-term) Trading Call<\/strong>: Only add to bullish positions on dips. Hold any remaining bearish positions as small hedges.<\/p>\n

Commentary<\/strong><\/p>\n

T2108 is now in the 90th percentile of all oversold periods since 1987. At 19%, it gained two percentage points and had a better showing than I would have expected on a day where the S&P 500 was essentially flat. This is not quite a bullish divergence, but it appears some stocks are trying to lead the market out of this oversold period. On the other hand, two things have me worried:<\/p>\n

The VIX (the volatility index)<\/strong>, remains resilient.
\nThe VIX looks like it wants to bounce off the 30 level which is the 20DMA. Its downward momentum has nearly evaporated (click here for the chart<\/a>). Moreover, the VXX, an ETF for VIX short-term futures, has simply churned for eight straight trading days. This pattern is starting to look like consolidation before another rally (click here for the chart<\/a>).<\/p>\n

Too many stocks exhibit waning momentum.<\/strong> Many of the patterns I am seeing are actually classic bearish set-ups (admittedly, this is a VERY informal statement!). Since T2108 is oversold, I am not interested in chasing these down. However, ONE chart I could not resist: XLV, the SPDRs Select Sector Health Care ETF. Technically, I should have waited for a previous day’s lows to break as a bearish confirmation, but the flattening 200DMA looming overhead looks like it will provide firm resistance in case the rally continues to inch along. <\/p>\n


\n\"XLV<\/a>
\n<\/center>
\n<\/p>\n

Given the mix of bearish technicals that I see, the short-term trading call will likely retain a recommendation for maintaining a small bearish position for hedging against downside risks. It also makes sense to lock in profits a little more aggressively to free up cash for the next dip.<\/p>\n


\nCharts below are the latest<\/strong> snapshots of T2108 (and the S&P 500)<\/em>
\nRefresh browser if the charts are the same as the last T2108 update.
\n<\/p>\n

Daily T2108 vs the S&P 500<\/strong>
\n\"T2108<\/p>\n

Black line: T2108 (measured on the right); Red line: S&P 500 (for comparative purposes)
\n<\/center><\/p>\n


\nWeekly T2108<\/strong>
\n\"Weekly
\n*All charts created using TeleChart:<\/strong> <\/a>
\n<\/center><\/p>\n

Related links:<\/strong>
\nThe T2108 Resource Page<\/a>
\nExpanded daily chart of T2108 versus the S&P 500<\/a>
\nExpanded weekly chart of T2108 <\/a><\/p>\n

Be careful out there!<\/p>\n

Full disclosure: long shares and calls on SSO, long VXX puts<\/p>\n","protected":false},"excerpt":{"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. You can follow real-time T2108 commentary on twitter using the #T2108 hashtag.) T2108 Status: 19% (Day #10 of the current oversold period). VIX Status: 32 General (Short-term) Trading Call: Only add … 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":[300,135,62],"tags":[65,716,226,1597,303,178,120,302],"class_list":["post-6774","post","type-post","status-publish","format-standard","hentry","category-health-care","category-stock-market-trading","category-technical-analysis","tag-sp-500","tag-spdrs-select-sector-health-care-etf","tag-t2108","tag-technical-analysis","tag-vix","tag-volatility","tag-vxx","tag-xlv"],"yoast_head":"\nT2108 Update - August 17, 2011 - 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\/2011\/08\/18\/t2108-update-110817\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"T2108 Update - August 17, 2011 - 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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