What is your definition of Trend? Is it the 50 day moving average? Is it the 200 Day moving average? Is it something else?
System Trader’s and Market Timing traders may use the 50 day Simple Moving Average as their trading plan. The 50 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 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 50 most actively traded ETF’s.
Security Name
Trend2
Ticker
Barclays High Yield Bond
Stay Long
JNK
BRIC IShares
Stay Long
BKF
Coal Power Shares
Stay Long
PKOL
DB Commodity Index
New Short
DBC
Diamond Trust DOW
Stay Long
DIA
Energy Select SPDR
Stay Long
XLE
Internet Holders
Stay Long
HHH
IPath India Index
Stay Long
INP
IShare Russell 2000
Stay Long
IWM
IShares 25 Index
Stay Long
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 Long
IYF
IShares Germany
Stay Short
EWG
IShares Hong Kong
Stay Long
EWH
IShares Latin America
Stay Long
ILF
IShares Mexico
Stay Long
EWW
IShares Mid Cap 400
Stay Long
IJH
IShares MSCI EAFE
Stay Long
EFA
IShares MSCI Japan
Stay Long
EWJ
IShares Pacific ex Japan
Stay Long
EPP
IShares S&P 500 Growth
Stay Long
IVW
Ishares S&P Small Cap 600
Stay Long
IJR
IShares Silver
Stay Long
SLV
IShares South Africa
Stay Long
EZA
IShares South Korea
Stay Long
EWY
IShares Taiwan
Stay Short
EWT
IShares United Kingdom
Stay Short
EWU
NDX 100
Stay Long
QQQQ
Oil Service Holders
Stay Long
OIH
Pharmaceutical Holders
Stay Short
PPH
PowerShares US Dollar Index
Stay Long
UUP
Russia
Stay Long
RSX
RYDEX S&P 500 Equal Weight
Stay Long
RSP
S&P 500
Stay Long
SPY
Semiconductor Holders
Stay Long
SMH
SPDR Consumer Descretionary
Stay Long
XLY
SPDR Consumer Staples
Stay Long
XLP
SPDR Gold Shares
Stay Long
GLD
SPDR Healthcare
Stay Long
XLV
SPDR Industrial Sector
Stay Long
XLI
SPDR International Real Estate
Stay Long
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 Long
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 50 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 50 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
Goog blog!!
Thank you.
Please hold out in the future.
...(I'd be pleased if you exchange reciprocal link with me.)
forex chart analysis and a cat
Posted by: forex-cat | 03/09/2010 at 09:46 PM