(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 occasionally posted on twitter using the #120trade hashtag. T2107 measures the percentage of stocks trading above their respective 200DMAs)
T2108 Status: 31.0%
T2107 Status: 16.6%
VIX Status: 24.1
General (Short-term) Trading Call: bullish
Active T2108 periods: Day #2 over 20%, Day #1 over 30% (ends 6 days under 30% – corrected earlier data) (overperiod), Day #46 under 40%, Day #50 below 50%, Day #65 under 60%, Day #406 under 70%
Commentary
Market sentiment made another step in the right direction today. With T2108 closing at 31.0%, the market printed strong follow-through to Friday’s impressive bounce from oversold conditions. T2108 ended 6 days trading below 30%. This duration is around the mean amount of time for a trip below 30%. However, the chart below shows that the 46 days below 40% is an extremely long time. This is still a market under pressure.
Mean and Median Duration Below Given T2108 Threshold
The S&P 500 (SPY) gained a healthy 1.7% on the day. This is the second day in a row of gains. As the chart below shows, the index has not been able to string THREE days in a row of gains since the last gasps of the Santa Claus rally in late December. Yet one more way to appreciate the kind of selling pressure that has dominated the action in 2016.
The S&P 500 follows through on a sharp rebound off oversold conditions.
Tuesday’s move confirms once again overhead resistance for the VIX, but the trend remains up thanks to both the 20 and 50DMAs.
The volatility index, the VIX, fails to break resistance at its 2012 intraday high yet again.
