The S&P 500, that all-important index of the 500 largest domestic corporations, has moved above its long-term trend line. This move has implications for exchange traded funds (ETFs).
The 200-day moving average is a closely-watched indicator – it’s what we use here for our clients’ buy and sell strategy. When a position crosses over this line, it’s a signal that a potential long-term uptrend might be in place. Conversely, when a position falls below, it means a trend may be winding down. [Podcast 15: Back to the Markets.]
SPDRs (NYSEArca: SPY) is, however, flat year-to-date:
What does this mean for you? While it’s true that the S&P 500 has been trading in a narrow range for months now, sooner or later, it will break out. Those who got in when the S&P 500 first began trending up and moving out of the narrow space will be best positioned to take advantage of gains later. [Technical Analysis or Trend Following?]
The crossover is a signal that it might be time to examine your portfolio and look for potential opportunities. There are many ETFs sitting above their long-term trend lines right now. Are they right for you? Take a look. [An ETF Trend Following Plan for All Seasons.]
The 200-day crossover is no guarantee. But it’s a first step and a positive signal. The question now is whether it will stay above the long-term trend line and continue on, or will trendless markets be the name of the game through the end of the year?
There are several ways to manage and track these opportunities on ETF Trends. We have alerts, which send an email as soon as a trading signal is hit. With alerts, you never miss an opportunity to buy or sell. We also have a Watchlist, to which you can add ETFs to see where they are and whether any buying or selling needs to take place. Learn more about both features here and get started today!
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.