June 24, 2011
Both the S&P 500 Index (SPX) and its tracking ETF the S&P Deposit Receipts (NYSE: SPY) sold off on Thursday, June 23, a day after Fed Chairman Bernanke said that the economic recovery was progressing slower than he expected.
The SPX and SPY both reached their 200-day moving averages intra-day and reversed. Though they both closed with a loss, this was the second time the 200-day average was reached in the past week, each time marking an intra-day low.
Many investors see the 200-day moving average as the line between a bull trend and a bear trend. So the line is important to many.
Does this mean the selling is over? Maybe, and maybe not.
What it does do is give a solid and tight sell stop for those who might try a bullish position here. The 200-day average for the SPX is currently at 1262.64 and for the SPY it is at 126.43.
Bears could set a break of this average as a sell signal for a short position.
The Fibtimer.com (http://www.fibtimer.com) ETF Timing Strategy has a position in the S&P 500 SPDRs.