Two 200-Day Breaks

Two big asset-classes had major long-term trend reversals today.  When a stock or index is trading above its 200-day moving average, it is considered to be in a long-term uptrend.  When the price is trading below the 200-day, it is considered to be in a long-term downtrend.  Today, the US Dollar index closed above its 200-day for the first time since last May.  China's Shanghai Composite Index closed below its 200-day for the first time since last March.  The dollar has been rallying for a couple of months now, while China has been struggling, but today's moves are confirmations that the trends could be in place for longer than some thought.

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Comments

[John]

Is this really a break in the Shanghai Composite? I see it touching the 200 MA merely and being in a downtrend channel. Could still get a rescue bounce, but time will tell.

[Justin]

Could definitely get a bounce, but it closed about 3 points below its 200-day today. That's not much, but it's still a close below.

[Givemeabreak]

"When a stock or index is trading above its 200-day moving average, it is considered to be in a long-term uptrend."

Nonsense. Utter nonsense. Give me one study or a long run historical evaluation that says buying or selling on a 200 day average will make you money, in anything. Why not 100, 50, 2000, or 2 day? Does your investment group actually use the 200 day moving average for actual investing?

[Anirudh Sethi]

Visit my Blog and see my view on Shanghai Market :http://www.anirudhsethireport.com/shanghai-composite-2956-is-last-hope/

[Anwiya]

Ditto Givermeabreak's comment

[dirk]

200 day moving average has served my trading very well for the last 16 years. Superior risk adjusted returns and saved my tukus in 07 & 08. How'd you do lil john