Moving averages

I don't know about ya'll but my moving averages are going nuts. They are squeezing and that tells me WAIT! I need room for stock to move and there is very little. I think buybacks are messing around. So, I am following GW's 1-5 advice for August.

Hey Darcy,

You mean like the 20 and 50 on the daily? Apologies if the question seems dumb. I'm not as well versed in reading the MA as you are.

Moving averages can tell you more about where a stock will go IMHO than most any other indicator and much easier. Look at moving averages like a person and how much each one weighs. Do you think a 50-pound man can lift a 200-pound man easily? Can a 50-pound man lift a 20-pound man easily? Look at this like a 20, 50 and 200 moving average. I have these moving averages with designated colors. 20 is black, 50 is orange and 200 is brown. If my brown line (200) is above the orange line (50) and the orange is above the black (20) the weight is on the downside. If opposite, then the weight is on the upside. For instance, look at MRNA. These 8,21,55 charts are in conflict. The 8 and 21 show resistance while the 55 shows support using the moving averages. (This is 8/9/2020 at the close). For the DOW on daily the 50 is below the 20 a good sign for up EXCEPT the 200 is above both of them which shows pressure. BUT look at the 233, at the position of the 200. It has acted as support. I do not fight moving averages. These two charts I mentioned show how the moving averages are nuts. I think the market doesn't like anything, but they are holding where they are...at least for now. Remember GW said in 1-5 about candles..."Just turn them off". This is what caused me to look and study moving averages and never candles. My moving averages have to be similar on at least the 8,21, and 55 charts with room to move before I enter any trade. I am not a day trader. They use the 5, 8 and 13 moving averages to trade. I use the moving averages on my 8,13 21 chart and look at the 55 to see if I have room to move before I hit resistance or support. This is also based on a 20, 50 or 200 moving average. When the price matches on these charts which lines up with my moving averages, I know I have a trade. These are not lining up. I use Qharts tried others, but Qcharts is the best for how I trade. It is also August, and it still rings true...A choppy time in the market.

This morning DOW up over 400 points bouncing off the 200 moving average on the 233 so what does that mean? It means moving averages are nuts right now so for me I am cautious. Looks like the market moves best right now off "news" like today off the inflation report.



Edited 2 time(s). Last edit at 08/10/2022 08:29AM by Darcy3.

Thanks Darcy for posting this. It's very insightful. Definitely some food for thought.

For myself I trade the 223 and Daily charts. I'll look at the 55 to see if there's a better entry that might show up later in the day instead of jumping right in at the open just because I had entry at the end of the previous day.

You are welcome. What I see now...(12:04 8/10/22) Looking at the 3, and 5 chart you can see the Bollinger band is squeezing on the DOW. BB's are 2 price channels (where a stock can go = price channel) and the center of the BB is a simple moving average. Generally, the center of the BB is close to a 20-moving average. On my charts I have the center band in purple and the 20 moving (exponential) average in black. Most of the time they ride along each other BUT there are days they act very strange. What I mean is the purple band will go ______and then straight up or down while the 20 moves more along the same pattern as both price channels of the BB. When a squeeze on the BB happens it means the price is being squeezed this is a signal for a breakout (up or down). This is time to look at moving averages because they will signal which way a trade MIGHT go, remember they are magnets and magnets can pull an object toward it or repel it away from it. Expanding bands, which happens on volume, tells there is a trend in the market and when these bands are stable or contracting it means the market is slowing. Looking at the charts I use to trade the DOW is going to 33,172/ 33152 and if it breaks through that on my 13 chart the next stop will be 33,024 or 33,013 on the 21. (as of 8/10). How I trade is like S/O traded except I use larger moving averages not the 5 and 10. Those are too fast for me and I like to study my charts and when they come in agreement I am set to trade. Does this make me miss some trades? YES, but I like my method of KISS...Keep It Simple Stupid! For me this is simple, and I like my reward daily. I often watch videos on youtube because I am constantly learning. BTW. Check this out for technicals [www.investopedia.com]
That SQUEEZE is very important when trading according to moving averages. For the squeeze: [www.youtube.com]



Edited 1 time(s). Last edit at 08/11/2022 09:01AM by Darcy3.

Today on the daily DOW I see a resistance and if it breaks that next stop 33,700. Stoch RSI is showing oversold but remember that is only one indicator.

Darcy3 Wrote:
-------------------------------------------------------
> Today on the daily DOW I see a resistance and if
> it breaks that next stop 33,700. Stoch RSI is
gyuto knives
> showing oversold but remember that is only one
> indicator.


Ah, decoding the Dow like a financial Sherlock Holmes! Spotting resistance is like finding the hidden door to financial Narnia – and if it swings open, off to 33,700 we go, perhaps with a side trip to the land of oversold opportunities.



Edited 1 time(s). Last edit at 12/08/2023 05:55AM by JamesBasej.

Today Dec 5, 2023 I looked over my charts to see if I could find a trade. I planned on doing a PUT because at first the NASDAQ was down then quickly it turned. My brain was saying that there would be a good PUT to be placed I just needed to find it even though the NASDAQ turned.

Looking over my charts starting with the 5 and moving to the 8 giving a glance to the 55 I found my trade. AMZN! The 200 moving average was above the 50 moving average on my 8. 13, 21, 34 and 55 chart. This is not a good up signal. The candle was outside the BB on the 55 which further convinced me I would see a quick pull back. The move for up would be fighting these moving averages.

I bought 7 148 PUTS @ 11:11 for 2.66 and sold @ 11:54 for 3.70. Yes, I am happy and done for the day.

In order for me to buy a CALL I want to see on at least on my 8, 13 and 21 chart the 50 moving average be above the 200 and with my BB opening with the top one going up and the bottom one going down and the center line (20 moving average) turning up not flat.

That doesn't mean I wouldn't do a fast (very fast call) but for the most part I would still be looking at PUTS.

[centerpointsecurities.com].