About That Break of the 200-Day Moving Averages
- Posted by JC Parets
- on June 2nd, 2012
My friend Richard Ross was on CNBC on Friday talking numbers with Maria Bartiromo. And when asked about the recent break of the 200-day moving average in the S&P500, Rich suggests buying this dip, not selling. In fact, with all the grim economic headlines, indiscriminate panic driven selling and extreme sentiment, the technician at Auerbach Grayson thinks this is the type of market action that bottoms are made of.
I tend to agree with his statement that if it were just this easy to come in and sell the market whenever you break the 200-day moving average we would all be retired, and this simply is not the case. He further suggests that we’re more likely to see a false breakdown below the 200 day, that could create a fast move in the opposite direction. In this case, a reversal higher.
Nice job Rich
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J.C. Parets is the Founder & President of Eagle Bay Capital, LLC. He earned the Chartered Market Technician designation (CMT) and is a member of the Market Technicians Association. More
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