But you can’t use the indicator as a stand alone piece of data to help you “time the market.” It’s simply the S&P 500’s average closing price over the last 200 days. The 200-day moving average is a popular technical indicator which investors use to analyze price trends. What is the S&P 500 200 day moving average? The important difference in the market timers out there and those that adhere to a disciplined investment strategy (like the Liberated Investor Model™) is that most market timers are running for cover right now.Īfter all, the “holy grail” of all market timing indicators has been violated – referring again to the S&P 500 200-day moving average. He bought the dip on October 2nd, so those adding to their quality equity names, say, today, will be that much the wiser. Buffett have to say about the market breather? Yet each time this happened, the SPX held its long term positive trend and subsequently rallied to new all-time highs.

The recent trend chart action of the S&P 500 Index looks similar to what we saw back in May-June 2013 when the market corrected roughly -6.5%, and also to how it looked back in November 2012 when the SPX dropped approximately -8.2%.This is the first time the SPX has moved below its 200-day MA since mid-November 2012 at that time, the SPX only stayed below its 200-day MA for seven trading days before rallying back. With Monday’s market action, the SPX has breached its 200-day moving average, which lied at roughly 1905.The long term Bullish Support Line currently lies at 1820 (currently at 1905). The overall trend of the SPX remains positive at this time.This from our “data doctors” (all facts) at Dorsey Wright:

The big market “Noise” out there (and to be fair, I consider this piece of noise high-quality noise) is that the S&P 500 has dropped below its 200-day moving average.įew will tell you though, that this happened last in November 2012 and the S&P remained below the infamous 200-day moving average mark for a mere 7 days, after which the S&P 500 returned close to 30% for the year ending 2013.

This, by all accounts, puts Warren Buffett in the “men” category – given his investing track record and his recent proclamation of this market being an opportunity and not a tragedy.Īll markets must exhale after the run we’ve had – and that’s just what this is: A big, fat, ugly exhale. Not so “PC” I suppose, but they and I assume you get where I’m coming from. I’ve been sharing with clients that this type of market separates the “men from the boys.”

500 200 ema