The 200 day moving average

A very simplistic observation (I concede), but I notice that we are heading closer to the 200 day moving average. It is often said that bears live below the 200 day moving average and bulls live above it. This is the closest we have been to breaking the 200 day moving average for more than 1 year.

 

200 day moving average chart on Nasdaq

 

This may be of interest too <A HREF="http://www.enthios.com/trading/carta_diem.htm">http://www.enthios.com/trading/carta_diem.htm</A>

 

Thank you Dottom. There is some VERY neat analysis in your chart

 

Here are the lines that I keep drawing:

 

And this one:

DJ is through the trend line, Nas seems to go for it, head on.

 

Breaking the 200 day avg is no easy task. Take a look at the Nasdaq when it shimmied up and down the avg last summer only to settle below it later on. Also look at the SOX as it first approached the 200 avg from below a few months ago.

Usually several attempts and a range nearby are the prerequisites to breaking above. A first attempt and piercing are quite rare.

 

I can't take credit for that chart, it's from a guy named Michel and that's his website. He runs a Yahoo group <A HREF="http://groups.yahoo.com/group/enthios">enthios</A>.

I also thought it was very neat.