Please Note: Blog posts are not selected, edited or screened by Seeking Alpha editors.

Systematic Trading Plan: Current 50 Day Moving Average Signals December 4, 2009

|Includes: SPDR Dow Jones Industrial Average ETF (DIA), GLD, INP, QQQ, SLV, SPY
Systematic Trader’s will use the 50 day Simple Moving Average as their trading plan. The 50 day moving average is a good trading plan for indexes and ETF’s that have trend following characteristics. It can produce disastrous results if used for every index or ETF.
Other widely followed moving averages are the 100 day moving average and the 200 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 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 day moving average? There are so many people using the 50 day moving average, that we will often see extreme volatility in indexes when they cross both above and below the 50 day moving average.
The below chart shows the current 50 day simple moving average condition on the 40 most actively traded ETF’s. 
 
Security Name Above 50 Ticker Symbol
BRIC IShares Above BKF
Coal Power Shares Above PKOL
DB Commodity Index Above DBC
Diamond Trust DOW Above DIA
EWY Above EWY
IPath India Index Above INP
IShare Russell 2000 Above IWM
IShares 25 Index Above FXI
IShares Australia Above EWA
IShares Basic Materials Above IYM
IShares DJ Real Estate Above IYR
Ishares DJ Transportation Above IYT
IShares Germany Above EWG
IShares Hong Kong Above EWH
IShares Latin America Above ILF
IShares Mexico Above EWW
IShares Mid Cap 400 Above IJH
IShares MSCI EAFE Above EFA
IShares MSCI Japan Above EWJ
IShares Pacific ex Japan Above EPP
IShares S&P 500 Growth Above IVW
Ishares S&P Small Cap 600 Above IJR
IShares Silver Above SLV
IShares South Africa Above EZA
IShares Taiwan Above EWT
IShares United Kingdom Above EWU
NDX 100 Above QQQQ
Pharmaceutical Holders Above PPH
Russia Above RSX
S&P 500 Above SPY
Semiconductor Holders Above SMH
SPDR Consumer Descretionary Above XLY
SPDR Consumer Staples Above XLP
SPDR Gold Shares Above GLD
SPDR Healthcare Above XLV
SPDR Indutrial Sector Above XLI
SPDR Materials Above XLB
SPDR Metal & Mining Above XME
SPDR Mid Cap Above MDY
SPDR Technology Above XLK
Steel Market Vector Above SLX
Energy Select SPDR Below XLE
IShares Financial Sector Below IYF
Oil Service Holders Below OIH
SPDR International Real Estate Below RWX
SPDR S&P Homebuilders Below XHB
US Oil Below USO
You should not trade any systematic trading plan without proper back testing and analysis of the trading characteristics of the index, stock or ETF you are trading. 
This is a snap shot and you should be aware that this condition can and will change any day in the future.
We monitor the 50 day moving average daily along with a number of other systematic trading plans.
There is No “Holy Grail” in trading systems. Do not use the 50 day SMA or any other systematic trading system without proper research on the asset.
For questions on systematic trading, contact mark@seleznovcapitaladvisors.com
www.seleznovcapitaladvisors.com