Systematic Trader’s will use the 50 day Simple Moving Average as their trading plan. The 50 day moving average is a good trading plan for indexes and ETF’s that have trend following characteristics. It can produce disastrous results if used for every 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 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 chart shows the current 50 day simple moving average condition on the 40 most actively traded ETF’s. 

Security Name Trend2 Ticker Symbol
BRIC IShares Stay Short BKF
Coal Power Shares Stay Long PKOL
DB Commodity Index Stay Short DBC
Diamond Trust DOW Stay Long DIA
Energy Select SPDR Stay Short XLE
EWY Stay Long EWY
Internet Holders Stay Long HHH
IPath India Index Stay Long INP
IShare Russell 2000 Stay Long IWM
IShares 25 Index Stay Short FXI
IShares Australia Stay Short EWA
IShares Basic Materials Stay Long IYM
IShares DJ Real Estate Stay Long IYR
Ishares DJ Transportation Stay Long IYT
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 Stay Long EWW
IShares Mid Cap 400 Stay Long IJH
IShares MSCI EAFE Stay Short EFA
IShares MSCI Japan Stay Long EWJ
IShares Pacific ex Japan Stay Short EPP
IShares S&P 500 Growth Stay Long IVW
Ishares S&P Small Cap 600 Stay Long IJR
IShares Silver Stay Short SLV
IShares South Africa New Short EZA
IShares Taiwan New Long EWT
IShares United Kingdom Stay Short EWU
NDX 100 Stay Long QQQQ
Oil Service Holders Stay Short OIH
Pharmaceutical Holders Stay Long PPH
Russia Stay Long RSX
S&P 500 Stay Long SPY
Semiconductor Holders Stay Long SMH
SPDR Consumer Descretionary Stay Long XLY
SPDR Consumer Staples Stay Short XLP
SPDR Gold Shares New Short GLD
SPDR Healthcare Stay Long XLV
SPDR Indutrial Sector Stay Long XLI
SPDR International Real Estate Stay Short RWX
SPDR Materials Stay Long XLB
SPDR Metal & Mining Stay Long XME
SPDR Mid Cap Stay Long MDY
SPDR S&P Homebuilders Stay Long XHB
SPDR Technology Stay Long XLK
Steel Market Vector Stay Long SLX
US Oil Stay Short USO

You should not trade any systematic 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 systematic trading plans.

There is No “Holy Grail” in trading systems. Do not use the 50 day SMA or any other systematic trading system without proper research on the asset.

For questions on rule based, systematic trading, contact mark@seleznovcapitaladvisors.com

www.seleznovcapitaladvisors.com