As often is the case, the 200 day moving average can act as resistance or support. When an Index rises above the 200 day moving average only to fall back below, indicates resistance. We are now seeing several Indexes move back above their 200 day moving average.
For a true Trend change, these should stay above and others should shortly join these above their 200 day moving average.
At Seleznov Capital Advisors we watch these key levels to see the Index breaks down or the trend continues up. You can get these trading alerts nightly from our Daily Trading Signals Service.
System Trader’s and Market Timing traders may use the 200 day Simple Moving Average as their trading plan. The 200 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 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 200 day moving average? There are so many people using the 200 day moving average, that we will often see extreme volatility in indexes when they cross both above and below the 200 day moving average. It has been reported that Endowments like Harvard and Yale use the 200 Day Moving Average in modeling their portfolios.
The below chart shows the current 200 day simple moving average condition on over 50 most actively traded ETF’s.
|Wisdom Tree Total Dividend||Stay Short||DTD|
|US Oil||Stay Short||USO|
|Steel Market Vector||Stay Short||SLX|
|SPDR Technology||Stay Short||XLK|
|SPDR S&P Homebuilders||Stay Short||XHB|
|SPDR Mid Cap||New Long||MDY|
|SPDR Metal & Mining||Stay Short||XME|
|SPDR Materials||Stay Short||XLB|
|SPDR International Real Estate||New Long||RWX|
|SPDR Industrial Sector||New Long||XLI|
|SPDR Healthcare||Stay Short||XLV|
|SPDR Gold Shares||Stay Long||GLD|
|SPDR Consumer Staples||New Long||XLP|
|SPDR Consumer Descretionary||New Long||XLY|
|Semiconductor Holders||Stay Long||SMH|
|S&P 500||Stay Short||SPY|
|RYDEX S&P 500 Equal Weight||New Long||RSP|
|PowerShares US Dollar Index||Stay Long||UUP|
|Pharmaceutical Holders||Stay Short||PPH|
|Oil Service Holders||Stay Short||OIH|
|NDX 100||New Long||QQQQ|
|IShares United Kingdom||Stay Short||EWU|
|IShares Taiwan||Stay Short||EWT|
|IShares South Korea||Stay Long||EWY|
|IShares South Africa||Stay Long||EZA|
|IShares Silver||New Long||SLV|
|Ishares S&P Small Cap 600||New Long||IJR|
|IShares S&P 500 Growth||Stay Short||IVW|
|IShares Pacific ex Japan||Stay Short||EPP|
|IShares MSCI Japan||Stay Short||EWJ|
|IShares MSCI EAFE||Stay Short||EFA|
|IShares Mid Cap 400||New Long||IJH|
|IShares Mexico||Stay Long||EWW|
|IShares Latin America||New Long||ILF|
|IShares Hong Kong||Stay Short||EWH|
|IShares Germany||Stay Short||EWG|
|IShares Financial Sector||Stay Short||IYF|
|Ishares Emerging Markets||New Long||EEM|
|Ishares DJ Transportation||New Long||IYT|
|IShares DJ Real Estate||Stay Long||IYR|
|IShares Basic Materials||Stay Short||IYM|
|IShares Australia||Stay Short||EWA|
|IShares 25 Index||Stay Short||FXI|
|IShare Russell 2000||Stay Short||IWM|
|IPath India Index||Stay Long||INP|
|Internet Holders||Stay Short||HHH|
|Energy Select SPDR||Stay Short||XLE|
|Diamond Trust DOW||Stay Short||DIA|
|DB Commodity Index||Stay Short||DBC|
|Coal Power Shares||Stay Short||PKOL|
|BRIC IShares||Stay Short||BKF|
|Barclays High Yield Bond||Stay Long||JNK|
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 200 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 200 day SMA or any other system trading system without proper research on the asset.
For questions on rule based, system trading, contact