• shutterstock 31261684

shutterstock 31261684One of my favorite indicators for timing market bounces is the T2108 – it is the percentage of stocks trading above their 40-day moving average. I’ve already done a post on it this week, but I wanted to do another using a long-term view of where we were on it this morning when the market tried to sell-off again. 

When you look at the selling following the highs that were reached on December 29th and the selling that persisted thereafter, and then compare it to where the T2108 right before the major bounces like the March 2009 bottom, the 2011 summer sell-off, and the massive sell-off in August of last year, they are all very similar. 

Each sell-off, including the one that we are currently in, all reached single digits, with today reaching 9%. Each of these points resulted, in massive market bounces, and while the current market hasn’t written the story yet on what will be made of this one here, there is a very good chance that we will follow suit once again. 

Here’s the T2108:

t2108 -- oversold

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