T2107 - % of Stocks Above 200 Day PMA (Also T2s: 109, 111, 113, 115)
In this T2 indicator, every stock on the NYSE is represented because most of them do not trade exactly AT their 200- day moving average. This is why there is no T2 indicator for “Percentage of stocks trading BELOW their 200-day moving average”. One quick glance at the indicator on a day when it reports a value of 21 instantly tell you that 21% of stocks on the NYSE are trading above their 200–day price moving average and 79% of stocks are trading below their 200-day price moving average (PMA).
This can be useful information because it is a good indication of whether the overall market is overbought (spike up in T2107) or oversold (spike down in T2107).
These additional T2s show you the extremes; stocks that not only are trading above or below their 200-day moving averages, but those that have exceeded or fallen below their 200-day average by as much as 2 standard deviations.
- T2109 Percentage of stocks trading 1 channel above their 200-day moving average
- T2111 Percentage of stocks trading 2 channels above their 200-day moving average
- T2113 Percentage of stocks trading 1 channel below their 200-day moving average
- T2115 Percentage of stocks trading 2 channels below their 200-day moving average
T2115 points out instances where too many stocks have surged or plummeted at once by showing you what percentage of stocks are trading 2 channels below their 200-day moving average. To make the count for T2115, a stock must have fallen very far very quickly in recent trading. Peaks in T2115 naturally coincide with lows in the market because if a large number of stocks are trading well below their 200-day moving averages, then the market is going to be down.
To best understand T2115, pull up the chart plot a comparison graph using the Dow Jones Industrial Average (DJ-30). Set the time frame to weekly and remember to set your scaling to arithmetic when using the T2 indicators compared to a market index for a true picture of volatility.