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Woodshedder
Joined Nov 11, 2007
1,458 Blog Posts

Alert: SPY Slicing Through 200 Day Moving Average

Woodshedder Mon Aug 1, 2011 12:22pm EST 7 Comments

Really, this is not such a big deal.

Yes, today’s candle is wicked ugly. SPY gapped up to resistance at the 50 day moving average, and then plummeted, slicing its way beneath the 200 day moving average. (Click on chart to enlarge)

 

 

However ugly it may be, it is not as bearish as you might think. Here is a previous study which looks at what happens after a close beneath the 200 day moving average.

Fade the Bears and the 200 Day Moving Average

 

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7 comments

  1. mao_junior
    mao_junior
    August 1, 2011 at 12:53 pm

    great stuff as always by you!

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  2. Cheesetrader
    Cheesetrader
    August 1, 2011 at 6:31 pm

    The DJIA came right down to it’s 200 as well, I think – but yeah – I jumped in basis your prior post on this subject as well as the PPT – thank you, sir!

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  3. Keith Shepard
    Keith Shepard
    August 1, 2011 at 7:08 pm

    Totally agree. Way too many chartists make a big deal out of price moving below or above a particular moving average and it is not as important as they think. Maybe if you’re using the MA as a trade trigger, but for trend analysis, as you point out, it’s not very telling.

    Slope of moving averages way more important.

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