{"id":7484,"date":"2011-10-01T02:40:22","date_gmt":"2011-10-01T06:40:22","guid":{"rendered":"http:\/\/drduru.com\/onetwentytwo\/?p=7484"},"modified":"2011-10-01T02:42:41","modified_gmt":"2011-10-01T06:42:41","slug":"t2108-update-110930","status":"publish","type":"post","link":"https:\/\/drduru.com\/onetwentytwo\/2011\/10\/01\/t2108-update-110930\/","title":{"rendered":"T2108 Update &#8211; September 30, 2011 (Holding Trading Range&#8230;Just Barely)"},"content":{"rendered":"<p>(T2108 measures the percentage of stocks trading above their respective 40-day moving averages [DMAs]. 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.)<\/p>\n<p><strong>T2108 Status<\/strong>: 22%<br \/>\n<strong>VIX Status<\/strong>: 43<br \/>\n<strong>General (Short-term) Trading Call<\/strong>: Hold<\/p>\n<p><strong>Commentary<\/strong><br \/>\nI suppose it is fitting that <a href=\"http:\/\/www.marketwatch.com\/story\/us-stocks-drop-in-echo-of-tough-quarter-2011-09-30\" title=\"Stocks dive for worst quarter since crisis\" target=\"_blank\">the market ends its worst quarterly performance since 2008<\/a> near the bottom of a choppy trading range, T2108 scraping at oversold conditions once again, and <a href=\"http:\/\/stockcharts.com\/h-sc\/ui?s=$VIX&#038;p=D&#038;st=2011-05-30&#038;en=2011-09-30&#038;id=p80466768457\" title=\"4-month chart of the VIX\" target=\"_blank\">the VIX<\/a> stubbornly scratching at the top of its recent trading range. On the flip side, <a href=\"http:\/\/www.cnbc.com\/id\/44728727\" title=\"Bond Gains Seen Tougher After Best Quarter Since 2008\" target=\"_blank\">bonds reveled in their best quarterly performance since 2008<\/a>. These are all decent conditions for a big first-of-the-month, first-day-of-the-quarter rally. Such a move is probably the only thing that keeps <a href=\"http:\/\/stockcharts.com\/h-sc\/ui?s=$SPX&#038;p=D&#038;st=2011-05-30&#038;en=2011-09-30&#038;id=p80466768457\" title=\"4-month chart of the S&#038;P 500\" target=\"_blank\">the S&#038;P 500<\/a> from punching through 52-week lows soon. In fact, <a href=\"http:\/\/www.cnbc.com\/id\/44732020\" title=\"Looking for Market Bottom? There May Be Hope Yet\" target=\"_blank\">according to figures compiled by CNBC<\/a>:<\/p>\n<blockquote><p>&#8220;&#8230;when the third quarter sees an official correction, or a 10 percent or more drop, the ensuing quarter is almost always positive.<\/p>\n<p>The S&#038;P 500 for the July-to-September period lost 12 percent heading into Friday&#8217;s trading, which saw the market add to its losses. History, then, suggests that the following quarter will post a gain of 7.2 percent. The trend has held up eight out of nine times.&#8221;<\/p><\/blockquote>\n<p>If this history holds water yet again, the buying oversold conditions on T2108 could generate some very good profits in the fourth quarter. <\/p>\n<p>Note well that leading into Friday&#8217;s sell-off, the market had a very mixed performance on Thursday. T2108 surged from 23% to 28% while the S&#038;P 500 only increased 0.8%. At the same time, many high profile tech stocks sold off (for example, see <a href=\"http:\/\/drduru.com\/onetwentytwo\/2011\/09\/30\/netflix-tags-110-price-target\/\" title=\"Chart Review: Netflix Tags the $110 Target But More Downside To Come\" target=\"_blank\">NFLX<\/a> and <a href=\"http:\/\/drduru.com\/onetwentytwo\/2011\/09\/30\/baidu-breaks-down\/\" title=\"Chart Review: Baidu Breaks Down\" target=\"_blank\">BIDU<\/a>). <a href=\"http:\/\/stockcharts.com\/h-sc\/ui?s=$compq&#038;p=D&#038;st=2011-05-29&#038;en=2011-09-29&#038;id=p80466768457\" title=\"4-month chart of the NASDAQ ending on Thursday\" target=\"_blank\">The NASDAQ was down 0.4%<\/a>. I would have declared that Thursday printed a bullish divergence and anticipated a rally on Friday. This is a good reminder that these indicators are not perfect and risk must always be managed carefully.<\/p>\n<p>Once again, I am keeping a close eye on cyclical stocks. The market continues to react very poorly to bad news from cyclical companies. <a href=\"http:\/\/investor.shareholder.com\/ir\/releasedetail.cfm?releaseid=609820\" title=\"Ingersoll Rand Revises Third-Quarter and Full-Year 2011 Earnings Estimates\" target=\"_blank\">Ingersoll-Rand (IR) warned on earnings Friday morning<\/a> and lost 12% on the close. The only positive is that buyers bought the stock at the new intra-day 52-week lows and prevented the stock from closing at new 52-week lows.<\/p>\n<p><center><br \/>\n<figure id=\"attachment_7491\" aria-describedby=\"caption-attachment-7491\" style=\"width: 490px\" class=\"wp-caption aligncenter\"><a href=\"http:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2011\/10\/110930_IR.png\"><img loading=\"lazy\" decoding=\"async\" src=\"http:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2011\/10\/110930_IR.png\" alt=\"Ingersoll-Rand avoids closing at new 2011 lows following an earnings warning\" title=\"Ingersoll-Rand avoids closing at new 2011 lows following an earnings warning\" width=\"500\" height=\"350\" class=\"size-full wp-image-7491\" srcset=\"https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2011\/10\/110930_IR.png 500w, https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2011\/10\/110930_IR-300x210.png 300w\" sizes=\"auto, (max-width: 500px) 100vw, 500px\" \/><\/a><figcaption id=\"caption-attachment-7491\" class=\"wp-caption-text\">Ingersoll-Rand avoids closing at new 2011 lows following an earnings warning<\/figcaption><\/figure><br \/>\n<\/center><br \/>\n<\/p>\n<p>In sympathy, Caterpillar (CAT) experienced mostly selling pressure on the day. It now sits exactly on top of its 52-week closing low.<\/p>\n<p><center><br \/>\n<figure id=\"attachment_7492\" aria-describedby=\"caption-attachment-7492\" style=\"width: 490px\" class=\"wp-caption aligncenter\"><a href=\"http:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2011\/10\/110930_CAT.png\"><img loading=\"lazy\" decoding=\"async\" src=\"http:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2011\/10\/110930_CAT.png\" alt=\"Caterpillar rests right on the ledge\" title=\"Caterpillar rests right on the ledge\" width=\"500\" height=\"350\" class=\"size-full wp-image-7492\" srcset=\"https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2011\/10\/110930_CAT.png 500w, https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2011\/10\/110930_CAT-300x210.png 300w\" sizes=\"auto, (max-width: 500px) 100vw, 500px\" \/><\/a><figcaption id=\"caption-attachment-7492\" class=\"wp-caption-text\">Caterpillar rests right on the ledge<\/figcaption><\/figure><br \/>\n<strong>Source: charts from <a href=\"http:\/\/www.freestockcharts.com\/\" title=\"FreeStockCharts.com\" target=\"_blank\">FreeStockCharts.com<\/a><\/strong><br \/>\n<\/center><br \/>\n<\/p>\n<p>Finally, many steel stocks continue to flirt with their March, 2009 lows. For example, see the chart for <a href=\"http:\/\/stockcharts.com\/h-sc\/ui?s=X&#038;p=W&#038;st=2009-01-01&#038;en=2011-09-30&#038;id=p72691391741\" title=\"Chart of U.S. Steel from January, 2009 to Sept 30, 2011\" target=\"_blank\">U.S. Steel (X)<\/a> as it hovers about 10% above those climactic lows (click link).<\/p>\n<p>If the market manages to rally on Monday (or next week), either it will occur on the top of a large gap up or only after another wave of sellers gets washed out with new 52-week lows on the S&#038;P 500. Either way, brace yourselves..!<\/p>\n<p><center><br \/>\n<em>Charts below are the <strong>latest<\/strong> snapshots of T2108 (and the S&#038;P 500)<\/em><br \/>\nRefresh browser if the charts are the same as the last T2108 update.<br \/>\n<\/p>\n<p><strong>Daily T2108 vs the S&#038;P 500<\/strong><br \/>\n<a href=\"http:\/\/www.drduru.com\/money\/charts\/T2108-daily_s.png\"><img loading=\"lazy\" decoding=\"async\" src=\"http:\/\/www.drduru.com\/money\/charts\/T2108-daily_s.png\" width=\"500\" height=\"350\" alt=\"T2108 vs. the S&#038;P 500 (DAILY)\" title=\"T2108 vs. the S&#038;P 500 (DAILY)\"><\/a><\/p>\n<p>Black line: T2108 (measured on the right); Green line: S&#038;P 500 (for comparative purposes)<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\" src=\"http:\/\/www.drduru.com\/money\/charts\/T2108-weekly_s.png\" width=\"500\" height=\"350\" alt=\"Weekly T2108\" title=\"Weekly T2108\"><br \/>\n*<strong>T2108 charts created using <a href=\"http:\/\/www.freestockcharts.com\/\" title=\"Freestockcharts.com\" target=\"_blank\">freestockcharts.com<\/a><\/strong><\/a><br \/>\n<\/center><\/p>\n<p><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&#038;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 SSO, X<\/p>\n","protected":false},"excerpt":{"rendered":"<p>(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: 22% VIX Status: 43 General (Short-term) Trading Call: Hold Commentary I suppose it is fitting that the &#8230; <a title=\"T2108 Update &#8211; September 30, 2011 (Holding Trading Range&#8230;Just Barely)\" class=\"read-more\" href=\"https:\/\/drduru.com\/onetwentytwo\/2011\/10\/01\/t2108-update-110930\/\">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":[135,62],"tags":[64,63,761,762,65,226,1597,193,194],"class_list":["post-7484","post","type-post","status-publish","format-standard","hentry","category-stock-market-trading","category-technical-analysis","tag-cat","tag-caterpillar-inc","tag-ingersoll-rand-ltd","tag-ir","tag-sp-500","tag-t2108","tag-technical-analysis","tag-u-s-steel","tag-x"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.4 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>T2108 Update - September 30, 2011 (Holding Trading Range...Just Barely) - 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\/10\/01\/t2108-update-110930\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"T2108 Update - September 30, 2011 (Holding Trading Range...Just Barely) - 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]. 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: 22% VIX Status: 43 General (Short-term) Trading Call: Hold Commentary I suppose it is fitting that the ... 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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: 22% VIX Status: 43 General (Short-term) Trading Call: Hold Commentary I suppose it is fitting that the ... 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