T2108 Update – The S&P 500 Stairsteps Ever Higher And Still Avoids Overbought Status

T2108 Status: 67.5%
T2107 Status: 36.0% (finally reversed all of its August angst)
VIX Status: 14.2
General (Short-term) Trading Call: neutral
Active T2108 periods: Day #22 over 20%, Day #21 over 30%, Day #21 over 40%, Day #19 over 50%, Day #4 over 60% (overperiod), Day #336 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
The S&P 500 (SPY) started November with another strong showing as the index picks up where it left off with October’s extraordinary performance. It closed with a 1.2% gain and a level last seen during the heights of August. Incredibly, the index can now see fresh all-time closing highs just over the horizon (2130.82)…

The S&P 500 (SPY) has produced a steady…and very bullish…staircase pattern onward and upward toward fresh all-time highs.

Despite this strong and bullish breakout, I cannot flip the trading bias from neutral to bias. T2108, my favorite indicator, closed at 67.5%. So it is STILL churning below overbought territory and indicating that the on-going rally is not able to push new stocks over the hump. This churn is closing in on one month in duration. I am patiently waiting to see how the market behaves once this occurs: will the market finally lose momentum and reverse or will it get new life and launch into one of those epic oversold rallies?

T2107, the percentage of stocks trading above their respective 200DMAs, is more interesting. While T2108 has stalled, T2107 has marched along with the S&P 500. It is a slower moving index that has just now reversed all the angst from August. At 36.0%, T2107 is at a 2+ month high. Left in the rearview mirror are a W-bottom and a 50DMA breakout that defines the end of a primary downtrend.