My son and webmaster, Mike, has added a new visual representation of the Worden T2108 Indicator. This indicator acts as a pendulum of the market technicals, going from extreme readings of oversold, around 15% or below, and overbought, above 75%. It seems to me to work better with oversold readings. After an extreme oversold reading the market tends to rally quickly, as yesterday.
On the other end, especially in bull markets, it can remain above 75% for months. On January 6, it topped out at 89%, and the present decline began right away. At its low in October, it bottomed out around 1%. Only at the 1987 crash, did it register a reading below 1%. This bear market has resulted in very low readings, hitting 4.9% on November 2nd.
The indicator is charted daily in TC2007 back to October, 1986. T2108 measures the percentage of all NYSE stocks that closed above their simple 40 day moving average. The way I should use it during a bear market, is to not initiate new shorts when T2108 is oversold, and to watch for retracements in my short stocks. Another way would be to buy the Index ETF’s or options when T2108 is very oversold. Note, however, that if I do not post on a specific day, the pendulum will show its value as of the date and time of the last post. Good luck using T2108!