Dow says Hello to Its 200-Day For the First Time in 2013

Dow says Hello to Its 200-Day For the First Time in 2013




by Bespoke Investment Group

After rallying 6% from August 27th to September 18th, the Dow has now fallen 6% since then to get right back to where it was at the end of August.  Talk about a roller-coaster ride.  The move lower this time around, though, has the Dow staring at its 200-day moving average for the first time since the last day of 2012.  This morning the index touched up against its 200-day briefly before bouncing nicely to close up a bit on the day.

The 200-day moving average is seen as a long-term trend indicator.  When the index is above its 200-day and the 200-day is rising, the market is in a long-term uptrend.  Obviously a break below the 200-day would not be a positive sign for momentum traders, so the market's action over the next few days will be key.