The 250-SMA is also known as the year line. It is always used to tell whether the market is in bull or bear. When above it the market is strong or in bull, when under it is weak or in bear. Another more common practice is when there is a drop of 20% from the top is bear market, when there is a rise of 20% from the bottom is bull market.
Actually some stocks like MCD, KO and PEP can use the 250-SMA for buying and selling. For they always shuttles up and down the year line. Their demand are more stable no matter in prosperity or recession. Everyone needs them.
Now DJIA and S&P are both above the 250-SMA and NASDAQ is still under. Already said previously, during the drop, the indexes still would go down until all 3 major indexes touched the year line then it will have a stop and now there will be a strong rebound according to the Fibonacci series.
About the Author
Daniel Yue has been an active investor since 1980, with experience spanning stocks, currencies, futures, metals, and bonds. A scholar of the Chicago School of Economics, he holds a Certificate with Distinction from Cambridge University and a degree in International Trading from National Taiwan University. He served as Chief Analyst for over 30 years and Chief Mentor at Sincere Finance. In 2017, he received an award from the University of Arizona for financial internship leadership.
The analysis and opinions expressed in this article are for educational purposes only and do not constitute financial advice. Investing involves risk. Please consult a qualified financial advisor before making investment decisions.
About the Author
Daniel Yue has been an active investor since 1980, with experience spanning stocks, currencies, futures, metals, and bonds. A scholar of the Chicago School of Economics, he holds a Certificate with Distinction from Cambridge University and a degree in International Trading from National Taiwan University. He served as Chief Analyst for over 30 years and Chief Mentor at Sincere Finance. In 2017, he received an award from the University of Arizona for financial internship leadership.
The analysis and opinions expressed in this article are for educational purposes only and do not constitute financial advice. Investing involves risk. Please consult a qualified financial advisor before making investment decisions.