Updated July 2026
The T2108 indicator measures the percentage of stocks trading above their 40-day moving average. That is the entire formula. When the reading drops under 20, fewer than one in five stocks in the market is above its 40-day average, and the market is stretched to an extreme that historically resolves in a violent bounce. When it climbs over 80, nearly every stock looks perfect, and that euphoria is the warning.
Bulls on Wall Street, founded 2008 by Kunal Desai, is a trading education company offering a 60-Day Live Trading Bootcamp and the BullsVision live trading chatroom. Featured in Forbes, Fortune, and Inc. 7,000+ students trained since founding. This guide is written by Kunal Desai, a day trader since 1999 and full time since 2007.
I have had T2108 on my TC2000 layout for years. It sits in the corner of my screen, and I glance at it every single day. And most days it tells me absolutely nothing. That is not a flaw. That is the entire design. This indicator is useless 350 days a year and pure genius on the handful of days when it matters. Most traders get that backwards, and it costs them.
How T2108 Works: One Number for the Whole Market
T2108 is a market breadth indicator built by Worden, the company behind TC2000. Every day it counts how many stocks in the market are trading above their own 40-day simple moving average and expresses it as a percentage from 0 to 100.
A reading of 50 means half the market is above its 40-day line. A reading of 15 means 85 percent of stocks are below it. A reading of 85 means nearly everything is pointed up.
Why does that matter more than watching the S&P 500 itself? Because an index can be held up by a handful of mega caps while the average stock quietly falls apart, or an index can look weak while the average stock is basing and turning. Breadth tells you what the whole army is doing, not just the generals. Stocks move individually, but at true extremes they move together, and T2108 is the cleanest single number I have found for spotting the moments when the entire market has leaned too far in one direction.
The Signal Zones: Under 20, Under 10, Over 80
Under 20 is the oversold extreme. Fewer than 20 percent of stocks are above their 40-day average. Flip through your watchlist on a day like that and every single chart looks ugly. Broken trends, failed support, red everywhere. And that universal ugliness is exactly the point. When everything has already been sold, the market is ripe for a bounce. You get a reading under 20 maybe once or twice in a given year.
Under 10 is the generational extreme. It shows up maybe once every other year. In all my years of trading I have never seen a reading under 10 fail to bounce within days. Not once. It is the closest thing to a fat pitch that market breadth can give you.
Over 80 is the mirror image. Nearly every stock you flip through looks amazing. Everything is breaking out, everything is at or near highs, every chart is a beauty. Traders feel like geniuses at readings like that. But when every chart in the market agrees, the move is closer to its end than its beginning. Over 80 is not an automatic short signal. It is a signal to tighten up, take profits faster, and stop adding risk like the party runs forever.
And everything between 20 and 80? Nothing. No signal, no edge, no trade. Which brings me to how I actually use this thing.
Why T2108 Is Wall Art 350 Days a Year
In my layout, T2108 is essentially art. It hangs in the corner of my screen like a painting. I look at it every day, and almost every day it is just there, drifting somewhere in the middle of its range, telling me what I already know.
That sounds like an insult. It is the opposite. The genius of T2108 is that it is built to detect absolute extremes, and absolute extremes are rare by definition. An indicator that fires signals every week is an indicator you learn to ignore. T2108 stays silent for months, and that silence is what makes the alarm impossible to miss when it finally rings.
So no, this is not an intraday tool. It is not even really a daily tool. You do not enter trades off T2108. I trade my setups, the opening range breakout, the first pullback, the same patterns every day regardless of where breadth sits. What T2108 changes is context. At an extreme, it tells me which side of the market deserves my aggression and which side deserves my suspicion.
Case Study: The COVID Crash and the Reading Under 10
March 2020 was one of the fastest dumps in modern market history. COVID hit and the market made a five-week collapse that erased a third of its value. The NBER would later date it as the shortest recession on record.
The oversold signals during that crash were the largest and fastest I have seen since I started trading in 1999. T2108 did not just break 20. It collapsed under 10, the reading that shows up maybe once every other year. Practically every stock in the market was below its 40-day average at the same time.
And here is the part people forget. The market bottomed in late March and started ripping while COVID was still raging. Businesses were shutting down. Fear in the country was still climbing. The headlines got worse for weeks after the low. It did not matter. The extreme had already been hit, the sellers were already exhausted, and the rally ran while the news stayed terrible.
That same year gave two encores. The September 2020 pullback and the November pullback both dragged T2108 back down near 20, and both produced very good bounces. Three signals in one year from an indicator that usually gives one or two. That was 2020: a historic year with historic breadth extremes to match.
Case Study: The April 2026 Flush That Launched This Bull Run
The most recent example just happened. Through early 2026 the market slowly bled off. Nothing crazy, no crash, just a grinding slide over a couple of months inside what had become a consolidation stretching back more than six months. By early April, almost every stock looked perilous. Charts were breaking down everywhere, and the market looked ready to resolve that whole consolidation lower.
Then the Iran war headlines hit and delivered the final flush. That last leg of selling drove T2108 into the oversold zone. And instead of breaking down, the market put in its low and exploded. QQQ ran from the 560s to 750, one of the better bull runs we have seen.
Most people will say the rally happened because the war ended. I think that is beside the point. Wars are wars, and the technicals usually lead those kinds of things. The market had been consolidating for over six months. The war was simply the trigger that produced the final bleed, the final bleed produced the oversold extreme, and the extreme set up the next powerful move. Same script as COVID: the news made the low, but the breadth reading called the turn.
Technicals Lead the News
Both case studies teach the same lesson, and it is bigger than any single indicator. At true extremes, price and breadth turn before the headlines do. In 2020 the market rallied into worsening COVID news. In 2026 the setup was complete before anyone knew how the conflict would resolve. If you wait for the news to feel safe, you miss the move every time. The extreme is the signal. The headline is just the story people attach to it afterward.
How to Add T2108 in TC2000
T2108 is native to TC2000 since it is a Worden indicator. Type T2108 into the symbol box like a ticker and it loads as its own chart. I keep it as a small pane in the corner of my main layout next to a QQQ chart, so every morning I see price and breadth side by side without doing anything. Set it to a daily or weekly view. There is nothing to configure and no settings to optimize, which is part of why I trust it.
The Mistakes Traders Make With T2108
The first mistake is treating it like an entry signal. It is not one. A reading of 18 does not tell you what to buy or when. It tells you the environment favors longs and that panic shorting down here is picking up pennies in front of the bounce. You still need a setup, a trigger, and a stop, and your risk management does not get a day off because breadth is extreme.
The second mistake is fading strength too early. Traders see 75 or 80 and start shorting everything because the market feels too good. Overbought markets can stay overbought for weeks while momentum names double. Over 80 means tighten up and protect profits. It does not mean step in front of the train.
The third mistake is inventing extremes. A reading of 30 is not oversold just because it is below 50 and you want to buy a dip. The whole value of T2108 lives at the real thresholds. Under 20, under 10, over 80. If it is not there, it is wall art, and you should trade like it does not exist.
The fourth mistake is using it alone. Breadth extremes tell you a bounce is loading, but the actual trade still comes from the chart in front of you. Pair the reading with real candlestick patterns and confirmation, like a reversal candle on the index with expanding relative volume, before you commit size.
FAQ: The T2108 Indicator
What is the T2108 indicator?
T2108 is a market breadth indicator created by Worden that measures the percentage of stocks trading above their 40-day simple moving average, on a scale of 0 to 100. It is used to identify extreme oversold and overbought conditions across the entire market.
What is a good T2108 reading to buy?
Readings under 20 mark extreme oversold conditions where bounces historically develop within days. Readings under 10 are rarer, roughly once every other year, and have historically produced bounces within days every time. Between 20 and 80 the indicator gives no actionable signal.
What does T2108 above 80 mean?
Over 80 means more than 80 percent of stocks are above their 40-day moving average, an extreme overbought market where nearly every chart looks strong. It is a signal to take profits faster and reduce new risk, not an automatic signal to short.
How often does T2108 go under 20?
Roughly once or twice in a given year. Readings under 10 are rarer, appearing about once every other year, usually during panics like the March 2020 COVID crash.
Is T2108 a day trading indicator?
No. T2108 is not an intraday tool and not even a daily signal generator. It is a market context tool that matters only at extremes. Day traders use it to judge the environment, then trade their normal setups.
Where can I find the T2108 indicator?
T2108 is a Worden indicator available natively in TC2000. Type T2108 into the symbol box and it loads like a ticker. Other platforms offer similar breadth measures, often listed as the percentage of stocks above the 40-day moving average.
What is the difference between T2108 and the McClellan Oscillator?
Both measure market breadth. The McClellan Oscillator is built from advancing and declining issues and moves fast enough to generate frequent signals. T2108 measures the percentage of stocks above their 40-day average and is deliberately slow, which makes it better at flagging rare, high-conviction extremes rather than day-to-day swings.
Does T2108 work for swing trading?
Yes, arguably better than for day trading. Breadth extremes mark multi-day to multi-week turning points, which is exactly the timeframe swing traders operate on. An oversold extreme under 20 is a strong environment for initiating new swing longs on individual setups.
Can T2108 stay oversold for a long time?
It can stay low during severe bear phases, but historically readings under 10 have resolved in bounces within days rather than weeks. The deeper the extreme, the faster the snapback tends to arrive, because forced selling exhausts itself.
Should I short the market when T2108 is over 80?
Not automatically. Overbought markets can stay overbought while leading stocks keep running. Over 80 is a signal to tighten stops, take profits more aggressively, and avoid adding fresh risk, then let individual chart breakdowns provide actual short entries.
The Alarm That Almost Never Rings
T2108 is the cheapest insurance policy on my screen. It costs nothing, needs no settings, and asks for one glance a day. For months at a time it pays nothing back. Then once or twice a year the whole market leans too far in one direction, the reading hits an extreme, and that one glance is worth more than every oscillator on every chart I own.
Under 20, every chart is ugly and the bounce is loading. Under 10, in my experience it has never failed. Over 80, everyone is a genius and the clock is ticking. Everywhere else, it is wall art. Trade your setups, manage your risk, and let the corner of your screen stay quiet until it has something real to say.
Want to learn how we actually trade these extremes when they hit, live, in real time? The 60-Day Live Trading Bootcamp teaches the complete Bulls on Wall Street system, from market context tools like T2108 down to the exact entry patterns, position sizing, and risk rules we use every morning. It is how 7,000+ students learned to read the market instead of the headlines.
Kunal Desai is the CEO and founder of Bulls on Wall Street. A professional trader since 2007, he has navigated every major market cycle -- from the 2008 financial crisis to today's high-volatility environments. Having mentored 7,000+ students through his live trading bootcamps, Kunal trades live every morning in the Bulls on Wall Street Trading Chatroom and is dedicated to teaching real-world execution and high-probability strategies. Based in Miramar Beach, Florida.
