I characterize the market as trendless and “reversion to the mean” or Swing trading methods have been working the best. There are some Indexes now moving above their 50 day moving average. Notice the number of commodity based, coal, energy and basic material Indexes now that moved above their 50 day moving average.
Is this the start of a new Trend, or just another move to the top of the range? Keep checking back!
We track 29 trading plans and provide Daily Signals for 53 Indexes in our Daily Trading Signal Service We monitor trading signals for 53 Indexes at www.seleznovcapitaladvisors.com
System Trader’s and Market Timing traders may use the 50 day Simple Moving Average as their trading plan. The 50 day moving average is basic technical analysis. It is a good market timing trading plan for active trading in indexes and ETF’s that have trend following characteristics. It can produce disastrous results if used for every stock index, ETF, or stock.
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 Wall Street Journal displays the 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 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 table shows the current 50 day simple moving average condition on the 50 most actively traded ETF’s.
|Barclays High Yield Bond||Stay Long||JNK|
|BRIC IShares||Stay Long||BKF|
|Coal Power Shares||New Long||PKOL|
|DB Commodity Index||New Long||DBC|
|Diamond Trust DOW||New Long||DIA|
|Energy Select SPDR||New Long||XLE|
|Internet Holders||Stay Short||HHH|
|IPath India Index||Stay Long||INP|
|IShare Russell 2000||Stay Short||IWM|
|IShares 25 Index||New Long||FXI|
|IShares Australia||New Long||EWA|
|IShares Basic Materials||New Long||IYM|
|IShares DJ Real Estate||Stay Short||IYR|
|Ishares DJ Transportation||Stay Short||IYT|
|Ishares Emerging Markets||Stay Long||EEM|
|IShares Financial Sector||Stay Short||IYF|
|IShares Germany||Stay Long||EWG|
|IShares Hong Kong||Stay Long||EWH|
|IShares Latin America||New Long||ILF|
|IShares Mexico||New Long||EWW|
|IShares Mid Cap 400||Stay Short||IJH|
|IShares MSCI EAFE||Stay Long||EFA|
|IShares MSCI Japan||Stay Short||EWJ|
|IShares Pacific ex Japan||Stay Long||EPP|
|IShares S&P 500 Growth||New Long||IVW|
|Ishares S&P Small Cap 600||Stay Short||IJR|
|IShares Silver||Stay Short||SLV|
|IShares South Africa||Stay Long||EZA|
|IShares South Korea||Stay Long||EWY|
|IShares Taiwan||Stay Long||EWT|
|IShares United Kingdom||Stay Long||EWU|
|NDX 100||Stay Short||QQQQ|
|Oil Service Holders||Stay Long||OIH|
|Pharmaceutical Holders||New Short||PPH|
|PowerShares US Dollar Index||Stay Short||UUP|
|RYDEX S&P 500 Equal Weight||Stay Short||RSP|
|S&P 500||Stay Short||SPY|
|Semiconductor Holders||Stay Long||SMH|
|SPDR Consumer Descretionary||Stay Short||XLY|
|SPDR Consumer Staples||Stay Long||XLP|
|SPDR Gold Shares||Stay Short||GLD|
|SPDR Healthcare||Stay Short||XLV|
|SPDR Industrial Sector||Stay Short||XLI|
|SPDR International Real Estate||Stay Long||RWX|
|SPDR Materials||New Long||XLB|
|SPDR Metal & Mining||Stay Short||XME|
|SPDR Mid Cap||Stay Short||MDY|
|SPDR S&P Homebuilders||Stay Short||XHB|
|SPDR Technology||New Long||XLK|
|Steel Market Vector||New Long||SLX|
|US Oil||Stay Long||USO|
|Wisdom Tree Total Dividend||Stay Short||DTD|
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 day moving average daily along with a number of other system trading plans.
There is No “Holy Grail” in trading systems. Do not use the 50 day SMA or any other system trading system without proper research on the asset.
For questions on rule based, system trading, contact