200 Day Moving AverageAlot has been written about the precious 200 day moving average. It is the panacea of retracement levels, or so it is said.
The black line through the middle of the chart of the S&P 500, represents the 200 day moving average. As the pundits would have us believe, it represents a magical support level. As you can see the price is now straddling it, having gone below it, and not rising back above it.
We will monitor this here in this forum, live, to see if in fact this provides some support to current prices. Again, notice the heavy short position currently in place with the commercials below. My research has not identified any significance of any kind to this moving average. If you are a discretionary trader, maybe you can use it to your advantage.
I would argue, that whatever else you are using in addition to this, would probably be more valuable. However, let's just watch this over the next few weeks, and see if the market magically stops here.
2 comments:
With the commercials short, doesn't it seem the market is poised to go much lower? Then from where come all the stock market bulls? Today's CNN headline proclaims that since consumer spending is down and inflation is tamed, the Fed can stop raising rates, and the stock market returned to positive territory. I think anyone in the stock market now is just begging to lose their money.
I posted a new thread over at the piggington site, from Asia Times, which explains that emerging markets and other foreign funds will keep losing value as global liquidity dries up.
I do think the S&P has more to go on the downside, the commercials are doing absolutely no buying on this dip. This is a very bearish sign. I have some other proprietary things for valuations, that also signal more downside from here.
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