Moving Average Monday

Center stage today was the 200 day SMA on the major indices and key names.  An over-watched level? Yes, but with good reason.  The 200 period average is a time-tested smoothing mechanism that many market participants use as a key guidepost for the primary trend.  When price crosses this indicator, it warrants attention as it may indicate broader trend change.

Browse through the charts below, each stretching back roughly two years, illustrating key encounters with the 200 day SMA.  Currently SPY, DJIA, IWM are at, or slightly below their respective 200 day SMA’s, while the QQQ remains slightly above.

Looking closer at FANG, FB has sunk well below its 200 day, while both AMZN and NFLX have significant room before reaching theirs, despite the downturn.  Only GOOG is currently battling this key level.

It’s always worth taking a bird’s-eye view and proceeding with caution when indices reach this very closely watched level, as we would either expect buyers to markedly make a stand, or for selling to accelerate on a breakdown.