Alex Trias

Wide Fund Survey: Prices vs. Primary Trend

The primary trend can give some false positives - meaning, it is not unusual for a bear market rally to go as high, or indeed higher, than a 200 day simple or exponential moving average. A more useful tool, I believe, is seeing whether a 50 day moving average can cross above a 200 day moving average on heavy volume. We're seeing a convergence on some index ETFs - notably FXI and EEM.
More interestingly, we've seen the 50 day cross below the 200 day on a number of short ETFs - I just ran these averages on Yahoo finance and found this formation on SH, DOG, RWM, EFZ. If the short etfs are heading into bear markets, it strengthens the case that primary uptrends may form up on the corresponding long indexes (although you wouldn't expect that 100% of the time given the performance lag you typically see with short ETFs).