A simple way to identify the long-term trend of a market index or stock is to compare its price to its 200-day moving average.
The S&P 500 and the Dow are now trading above their 200-day moving averages. This is a positive sign for the stock market.
However, the direction of the moving average line itself is also important. A rise in the “slope” of this trendline would confirm that the long-term trend of the market has indeed changed. Stay tuned.
As these charts illustrate the 200-day moving average is a pretty good indicator of the market’s trend. When the price is below the 200 day line, the market trend is bearish. When the price is above the trendline, the market is bullish.
~Adam
