Here is a link to an article that was written by a well known financial author regarding moving averages and how they can be interpreted. I have long interpreted them this way, hence my often quoted line from a Mentor of mine, “Nothing bad happens when price is above a rising 50-day moving average.” The Market Alert System was built around this exact concept using a longer time frame as it is designed for investors, not traders. However, depending upon your market orientation regarding holding times of your trades (scalping, day trading, swing trading, or investing), finding a moving average to pay attention to is the first step to following the “trend” of the market for your particular time frame.
Once you have identified a moving average: 1) is price above or below it; 2) is the moving average rising or falling? It is why my market alert signals are sent out with BUY/ON ALERT/SELL as well as the slope (RISING vs. FALLING) of the Market Alert Line. A rising line is decidedly more bullish than a rolling over or falling line and is part of the “prudent modifiers” I point out in the system tab on this site. Helene’s article is a great read for any technician of the market. I highly recommend it.
The regular Monthly Market Alert e-mail and post will be going out this weekend. Happy Easter to all that celebrate the holiday.