The 50 day moving average is of great importance in my trading. I measure the time a stock or index is below its 50 day line and compare it to the time it spends above the 50 day line. When the average time spent below the line starts to decrease while the average time above starts to increase, I feel that anticipates a change in trend from bearish to bullish. You can reverse this when going from bullish to bearish.
Thank you for the share, but this sort of info is not very relevant to someone who daytrades and is looking for the next 3 point S&P move up or down. There are usually at least 6 of these every day. It sounds as if this info might be of more use to the "Elite Investor" as I suspect your method requires taking and holding positions for some time.
What an un-insightful and narrow-minded response! And... you just signed up for ET in March!? Give me a break. So let's see now... anything beyond a day is "investing", in your brilliant analysis?!
Iceman, didn't you that nobody ever made money trading before daytrading came along? That someone who claims to "love2trade" would offhandedly dismiss such a time honored tool as the 50MA is laughable..
You can apply this technique to many time frames. If you are in a period where the average time spent above the 50 day average has started to exceed the average time spent below the 50 day average you are in a "bullish" period and you have an increased chance of an uptrend remaining in place. Also the 50 day period is a good measure of a market's or of a stock's health. Strong indices will dip below their 50 day lines for two days at the most and then rocket back above the 50 day line. Weak indices and stocks will go back above their 50 day lines and then collapse sharply under them. For short term traders these days around the 50 day line are useful for longer term traders these trend changes are useful.
Well, I thought I'd heard of everything. But this is a new one on me. Time spent below and above and MA? Well...who knows.
About six weeks ago there was a shift where the average time above the 50 day line started to expand while the average time below the line started to contract.
hwaxen, I think he was asking for chart examples. Charts speak a thousand words and such words helps to eliminate many debates. Without any charts... what you say most likely won't be taken seriously or will cause a lot of misunderstandings... Thus, in my opinion...no matter how simple or complex a technical strategy is...your goal is to SHOW traders what your talking about. Without such...its a poor presentation. NihabaAshi