(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: 60.3%
T2107 Status: 32.8%
VIX Status: 15.1
General (Short-term) Trading Call: neutral, changed from mildly bearish – see below
Active T2108 periods: Day #21 over 20%, Day #20 over 30%, Day #20 over 40%, Day #18 over 50%, Day #3 over 60% (overperiod), Day #335 under 70% (underperiod)
Reference Charts (click for view of last 6 months from Stockcharts.com):
S&P 500 or SPY
SDS (ProShares UltraShort S&P500)
U.S. Dollar Index (volatility index)
EEM (iShares MSCI Emerging Markets)
VIX (volatility index)
VXX (iPath S&P 500 VIX Short-Term Futures ETN)
EWG (iShares MSCI Germany Index Fund)
CAT (Caterpillar).
IBB (iShares Nasdaq Biotechnology).
Commentary
After the U.S. Federal Reserve announced its latest decision on monetary policy, the S&P 500 extended its breakout. The U.S. dollar also broke out. In the two days since, both have stalled out.
The S&P 500’s post Fed rally has already stalled.
No post-Fed follow-through yet for the U.S. dollar index
Incredibly, T2108 has still failed to cross the overbought threshold. In fact, the momentum on my favorite technical indicator is ever so subtly waning. On Wednesday, T2108 only reached a high of 65.4%. It is now back to 60.3%. This is T2108’s 4th lowest close since the churn directly underneath the overbought threshold began over three weeks ago. This waning momentum is a slightly bearish sign as it contradicts the apparent momentum from the S&P 500.
