This was a nice up week in the markets with many Indexes and ETF’s at or above their 200 day moving average.  Today, September 3, 2010 the DIA, Diamonds and QQQQ, Nasdaq 1000 ETF’s closed above their 200 day moving averages. Also notable was the closing of the UUP, U.S. Dollar Indexes closing below its 200 day moving average.

Over the past couple months, these have been false breakouts.  The action next week will give us a clue if this will be another false breakout or a new Trend.

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. 

Security Name Trend3 Ticker
Barclays High Yield Bond Stay Long JNK
BRIC IShares Stay Long BKF
Coal Power Shares Stay Short PKOL
DB Commodity Index Stay Short DBC
Diamond Trust DOW New Long DIA
Energy Select SPDR Stay Short XLE
Internet Holders Stay Long HHH
IPath India Index Stay Long INP
IShare Russell 2000 Stay Short IWM
IShares 25 Index Stay Short FXI
IShares Australia Stay Long EWA
IShares Basic Materials Stay Long IYM
IShares DJ Real Estate Stay Long IYR
Ishares DJ Transportation Stay Long IYT
Ishares Emerging Markets Stay Long EEM
IShares Financial Sector Stay Short IYF
IShares Germany Stay Short EWG
IShares Hong Kong Stay Long EWH
IShares Latin America Stay Long ILF
IShares Mexico New Long EWW
IShares Mid Cap 400 Stay Long IJH
IShares MSCI EAFE Stay Short EFA
IShares MSCI Japan Stay Short EWJ
IShares Pacific ex Japan Stay Long 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 Long EZA
IShares South Korea Stay Long EWY
IShares Taiwan Stay Long EWT
IShares United Kingdom New Long EWU
NDX 100 New Long QQQQ
Oil Service Holders Stay Short OIH
Pharmaceutical Holders Stay Short PPH
PowerShares US Dollar Index New Short UUP
Russia New Long RSX
RYDEX S&P 500 Equal Weight New Long RSP
S&P 500 Stay Short SPY
Semiconductor Holders Stay Short SMH
SPDR Consumer Descretionary Stay Long XLY
SPDR Consumer Staples Stay Long XLP
SPDR Gold Shares Stay Long GLD
SPDR Healthcare Stay Short XLV
SPDR Industrial Sector Stay Long XLI
SPDR International Real Estate Stay Long RWX
SPDR Materials Stay Long XLB
SPDR Metal & Mining Stay Short XME
SPDR Mid Cap Stay Long MDY
SPDR S&P Homebuilders Stay Short XHB
SPDR Technology Stay Short XLK
Steel Market Vector New Long SLX
US Oil Stay Short USO
Wisdom Tree Total Dividend Stay Long 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