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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 September 10, 2010 0 comments
    Sep 9, 2010 5:36 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
    In July, there was a great deal of talk about the negative “Death Cross” of most Indexes. This was to signal a crash in the Indexes. The crash has not occurred, but rather a sideways action over the past couple of months. On September 9, 2010, the EEM, Emerging Markets has Signaled a new Buy 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. 
    On July 6, 2010 the S&P 500 gave a “Death Cross” Sell Signal. It is still on a Sell Signal. Most other Indexes are also on a “Death Cross”.
    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 ShortBKF
    Coal Power SharesStay ShortPKOL
    DB Commodity IndexStay ShortDBC
    Diamond Trust DOWStay ShortDIA
    Energy Select SPDRStay ShortXLE
    Internet HoldersStay ShortHHH
    IPath India IndexStay LongINP
    IShare Russell 2000Stay ShortIWM
    IShares 25 IndexStay ShortFXI
    IShares AustraliaStay ShortEWA
    IShares Basic MaterialsStay ShortIYM
    IShares DJ Real EstateStay LongIYR
    Ishares DJ TransportationStay LongIYT
    Ishares Emerging MarketsNew LongEEM
    IShares Financial SectorStay ShortIYF
    IShares GermanyStay ShortEWG
    IShares Hong KongStay LongEWH
    IShares Latin AmericaStay ShortILF
    IShares MexicoStay ShortEWW
    IShares Mid Cap 400Stay ShortIJH
    IShares MSCI EAFEStay ShortEFA
    IShares MSCI JapanStay ShortEWJ
    IShares Pacific ex JapanStay ShortEPP
    IShares S&P 500 GrowthStay ShortIVW
    Ishares S&P Small Cap 600Stay ShortIJR
    IShares SilverStay LongSLV
    IShares South AfricaStay LongEZA
    IShares South KoreaStay LongEWY
    IShares TaiwanStay LongEWT
    IShares United KingdomStay ShortEWU
    NDX 100Stay ShortQQQQ
    Oil Service HoldersStay ShortOIH
    Pharmaceutical HoldersStay ShortPPH
    PowerShares US Dollar IndexStay LongUUP
    RussiaStay ShortRSX
    RYDEX S&P 500 Equal WeightStay ShortRSP
    S&P 500Stay ShortSPY
    Semiconductor HoldersStay ShortSMH
    SPDR Consumer DescretionaryStay ShortXLY
    SPDR Consumer StaplesStay ShortXLP
    SPDR Gold SharesStay LongGLD
    SPDR HealthcareStay ShortXLV
    SPDR Industrial SectorStay ShortXLI
    SPDR International Real EstateStay LongRWX
    SPDR MaterialsStay ShortXLB
    SPDR Metal & MiningStay ShortXME
    SPDR Mid CapStay ShortMDY
    SPDR S&P HomebuildersStay ShortXHB
    SPDR TechnologyStay ShortXLK
    Steel Market VectorStay ShortSLX
    US OilStay ShortUSO
    Wisdom Tree Total DividendStay ShortDTD
    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
     
    Themes: market timing, golden cross, death cross, etf, system trading, active trading, technical analysis, trend following, 50 day moving average, stock index, moving averages, 100 day moving average, 200 day moving average, cross of the shorter moving average, 3 moving averag 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
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