Posted by & filed under Economic Analysis, Market Analysis.

Description: So many people are following the 200-day moving average, to help differentiate between bull and bear markets, that the indicator may have lost the effect it’s had for decades, according to MarketWatch columnist Mark Hulbert. Laura Mandaro reports. Image courtesy of Getty Images.

Source: Marketwatch.com – video report

Date: 08/02/2011

Link:  http://www.marketwatch.com/video/asset/sp-500-crash-through-200-day-average-not-all-bad/63F9BE13-BD5C-451B-B060-D6DD87BD8CD3

Questions for discussion:

  • Why is the 200-day moving average considered a good predictor of market direction; or is it?
  • How have the markets behaved since this article was posted?
  • Why would some analysts consider any moving average invalid today?

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