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Mark Seleznov
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Mark Seleznov is the Chief Investment Officer of Seleznov Capital Advisors (SCA). SCA is a SEC registered investment advisory firm that performs advisory services for Mutual Funds, Trusts, 401K plans and Individuals. Mark supervises the asset allocation programs of SCA in a variety of strategic... More
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  • System Trading Plan: The Death Cross and Golden Cross of the 50 Day and 200 Day Moving Average Current 50-200 Day Moving Average Signals for October 25, 2010  0 comments
    Oct 22, 2010 5:35 PM | about stocks: SPY, QQQ, DIA, BKF, PKOL, EEM, XLE, EWY, HHH, INP, IWM, IYR, IYT, IYF, EWG, EWH, ILF, EWW, IJH, EFA, EEP, EWA, EWJ, EPP, FXI, IVW, IJR, SLV, EZA, EWT, EWU, OIH, PPH, RSX, SMH, XLY, XLP, GLD, XLV, XLI, RWX, XLB, XME, MDY, XHB, XLK, SLX, USO, JNK, BFK, RSP, DTN, UUP, DBC
    More and more Indexes are moving to Buy Signals on the “Golden Cross”. Today, October 22, 2010 the S&P 500, SPY gave a “Golden Cross” Buy Signal. The last Sell Signal was not a very good one, we will watch to see if this Buy Signal is a better Signal.
     
    The Golden Cross and Death Cross is a system covered in our Daily Trading Signals. Its performance versus other trading systems is also tracked. Signals are long term trend following and watched by most market technicians. You may also sign up for our Free Weekly Commentary and Daily 50 Day moving average signals on 22 Indexes at the top right of our home page at www.seleznovcapitaladvisors.com
     
    The Golden Cross or Death Cross occurs when the 50 Day Moving Average crosses the 200 Day Moving Average. When the 50 Day Moving Average is crossing from below the 200, it is called “Golden Cross”. When the 50 Day Moving average crosses from above to below the 200 Day Moving Average it is called the “Death Cross”. This system is a very long term trading system and is often very late on entry and exit. It does have a fairly good track record with many Indexes and other assets. It makes very few trades as compared to shorter term moving averages like the 50 Day Moving Average system. It can produce disastrous results if used for every stock index, ETF, or stock.
    Other widely followed moving averages are the 50 day moving average and the 100 day moving average. Some money managers will use these moving averages with a shorter moving average and use the cross of the shorter moving average above or below the longer moving average to generate trading signals. The Wall Street Journal displays a 65 Day Moving Average in their charts. The goal of two moving averages and even 3 moving averages is to eliminate whipsaws that often occur with moving averages as a technical analysis indicator.
     Why should you care about the signals produced with the 50-200 day moving average? There are so many people using the 50-200 day moving average, that we will often see extreme volatility in indexes when they cross both above and below the 50-200 day moving average. 
    The table below shows the current 50-200 day simple moving average condition on the 50 most actively traded ETF’s. 
    Security NameTrend5Ticker
    Barclays High Yield BondStay LongJNK
    BRIC ISharesStay LongBKF
    Coal Power SharesStay LongPKOL
    DB Commodity IndexStay LongDBC
    Diamond Trust DOWStay LongDIA
    Energy Select SPDRStay ShortXLE
    Internet HoldersStay LongHHH
    IPath India IndexStay LongINP
    IShare Russell 2000Stay ShortIWM
    IShares 25 IndexStay LongFXI
    IShares AustraliaStay LongEWA
    IShares Basic MaterialsStay LongIYM
    IShares DJ Real EstateStay LongIYR
    Ishares DJ TransportationStay LongIYT
    Ishares Emerging MarketsStay LongEEM
    IShares Financial SectorStay ShortIYF
    IShares GermanyStay LongEWG
    IShares Hong KongStay LongEWH
    IShares Latin AmericaStay LongILF
    IShares MexicoStay LongEWW
    IShares Mid Cap 400Stay LongIJH
    IShares MSCI EAFEStay LongEFA
    IShares MSCI JapanStay ShortEWJ
    IShares Pacific ex JapanStay LongEPP
    IShares S&P 500 GrowthStay LongIVW
    Ishares S&P Small Cap 600Stay ShortIJR
    IShares SilverStay LongSLV
    IShares South AfricaStay LongEZA
    IShares South KoreaStay LongEWY
    IShares TaiwanStay LongEWT
    IShares United KingdomStay LongEWU
    NDX 100Stay LongQQQQ
    Oil Service HoldersStay ShortOIH
    Pharmaceutical HoldersStay LongPPH
    PowerShares US Dollar IndexStay ShortUUP
    RussiaStay LongRSX
    RYDEX S&P 500 Equal WeightStay LongRSP
    S&P 500New LongSPY
    Semiconductor HoldersStay ShortSMH
    SPDR Consumer DescretionaryStay LongXLY
    SPDR Consumer StaplesStay LongXLP
    SPDR Gold SharesStay LongGLD
    SPDR HealthcareStay ShortXLV
    SPDR Industrial SectorStay LongXLI
    SPDR International Real EstateStay LongRWX
    SPDR MaterialsStay LongXLB
    SPDR Metal & MiningStay ShortXME
    SPDR Mid CapStay LongMDY
    SPDR S&P HomebuildersStay ShortXHB
    SPDR TechnologyStay LongXLK
    Steel Market VectorStay LongSLX
    US OilStay ShortUSO
    Wisdom Tree Total DividendStay LongDTD

    You should not trade any system trading plan without proper back testing and analysis of the trading characteristics of the index, stock or ETF you are trading. 
    These trading signals are provided courtesy of the website you are viewing. This information should not be used without research and advice from a financial professional.
    Be aware that this condition can and will change any day in the future.
    We monitor the 50-200 day moving cross system daily along with a number of other system trading plans.
    There is No “Holy Grail” in trading systems. Do not use the 50-200 day SMA or any other system trading system without proper research on the asset.
    For questions on rule based, system trading, contact
    mark@seleznovcapitaladvisors.com
     
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