Big gains in the stock Indexes today give the largest number of new Buy Signals for the 200 day moving average in some time. The Nasdaq 100, Russell 2000 and Mid Caps are some of the Indexes that closed back above their 200 day moving average today.
Will this be a whipsaw or the start of a new trend? Keep checking to see if this signal keeps traders on a Buy Signal or just hits resistance.
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. If you are using the 200 day moving average as the indicator, this chart of the SPY, S&P 500 should interest you.
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.
| Security Name | Trend3 | Ticker |
| Barclays High Yield Bond | Stay Short | JNK |
| BRIC IShares | Stay Short | BKF |
| Coal Power Shares | Stay Short | PKOL |
| DB Commodity Index | Stay Short | DBC |
| Diamond Trust DOW | Stay Short | DIA |
| Energy Select SPDR | Stay Short | XLE |
| Internet Holders | Stay Short | HHH |
| IPath India Index | New Long | INP |
| IShare Russell 2000 | New Long | IWM |
| IShares 25 Index | Stay Short | FXI |
| IShares Australia | Stay Short | EWA |
| IShares Basic Materials | Stay Short | IYM |
| IShares DJ Real Estate | Stay Long | IYR |
| Ishares DJ Transportation | New Long | IYT |
| Ishares Emerging Markets | Stay Short | EEM |
| IShares Financial Sector | Stay Short | IYF |
| IShares Germany | Stay Short | EWG |
| IShares Hong Kong | Stay Short | EWH |
| IShares Latin America | Stay Short | ILF |
| IShares Mexico | New Long | EWW |
| IShares Mid Cap 400 | New Long | IJH |
| IShares MSCI EAFE | Stay Short | EFA |
| IShares MSCI Japan | Stay Short | EWJ |
| IShares Pacific ex Japan | Stay Short | EPP |
| IShares S&P 500 Growth | Stay Short | IVW |
| Ishares S&P Small Cap 600 | New Long | IJR |
| IShares Silver | Stay Long | SLV |
| IShares South Africa | Stay Short | EZA |
| IShares South Korea | Stay Short | EWY |
| IShares Taiwan | Stay Short | EWT |
| IShares United Kingdom | Stay Short | EWU |
| NDX 100 | New Long | QQQQ |
| Oil Service Holders | Stay Short | OIH |
| Pharmaceutical Holders | Stay Short | PPH |
| PowerShares US Dollar Index | Stay Long | UUP |
| Russia | Stay Short | RSX |
| RYDEX S&P 500 Equal Weight | New Long | RSP |
| S&P 500 | Stay Short | SPY |
| Semiconductor Holders | New Long | SMH |
| SPDR Consumer Descretionary | Stay Long | XLY |
| SPDR Consumer Staples | New Long | XLP |
| SPDR Gold Shares | Stay Long | GLD |
| SPDR Healthcare | Stay Short | XLV |
| SPDR Industrial Sector | New Long | XLI |
| SPDR International Real Estate | Stay Short | RWX |
| SPDR Materials | Stay Short | XLB |
| SPDR Metal & Mining | Stay Short | XME |
| SPDR Mid Cap | New Long | MDY |
| SPDR S&P Homebuilders | New Long | XHB |
| SPDR Technology | Stay Short | XLK |
| Steel Market Vector | Stay Short | SLX |
| US Oil | Stay Short | 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 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
mark@seleznovcapitaladvisors.com
www.seleznovcapitaladvisors.com
