The T2108 indicator provided by TC2000 is one of the best indicators for measuring the health of stocks, and in particular forecasting when a major market bounce off of oversold conditions or a major market sell-off following bubble-like market conditions will occur. 

This market reminds me so much of August 2015, that it isn’t even funny. The apathy in stocks are remarkable. The market keeps trying to push higher, meanwhile stocks aren’t following suit. The last time this happened (again, last August), the market had a massive sell-off. bearish divergence

Yes, the market is trying to sell-off. But on the same note, the market keeps buying up any attempt to sell-off. In fact, they won’t even let the bears get their car out of the garage before the bulls maliciously slash their tires. A five minute sell-off (literally) is enough to trigger the buy machines to save face, every time!

But nonetheless, under the surface, the story is not the same. Stocks are eroding and the number of stocks trading above their 40-day moving average back in July was 82%. Today it is at 59% and it keeps dropping. In fact, prior to the employment report on Friday, it was trading at just 48%. 

So be guard. Don’t let this market catch you by surprise if it does indeed sell-off (and I am talking more than just an intraday sell-off). You want to be prepared and ready for action. 

t2108 bearish divergence 40 day moving average

 

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