(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: 30.0%
T2107 Status: 28.6%
VIX Status: 17.9
General (Short-term) Trading Call: bullish
Active T2108 periods: Day #2 over 20%, Day #5 under 30% (day 5 AT 29.98%), Day #6 under 40%, Day #10 below 50%, Day #25 under 60%, Day #366 under 70%

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
The market is doing its best to invalidate all the concerns I have raised about deteriorating technicals going into the last oversold period. In the wake of the Federal Reserve’s first rate hike in 9 years, and after 7 years of zero rates, the S&P 500 (SPY) made a power move with a 1.5% gain that closed the index nicely above converged resistance at the 50 and 200-day moving averages (DMAs).

The S&P 500 makes bullish surge to challenge the last topping pattern.

Even better, T2108, the percentage of stocks trading above their respective 40DMAs, soared from 21.5% to 30.0%. This move finally reverses all the losses from the last oversold period and then some. If (once?) T2108 closes above 30% alongside follow-through buying on the S&P 500, I may soon need to reconsider my assumption that the market printed a top going into the last oversold period.

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