S&P Opens the trading day, near 50 Day Moving Average - First time this year.

April 19, 2013 - PRLog -- Quite a technical event for the S&P derivative SPY , which is opening the trading day very close to it's 50 day moving average (MA).  SPY is the ticker symbol of SPDR (S&P depository receipts) trading on the NYSE, some call it Spiders.  The 50 day MA is one of the most widely followed technical indicators. It's a reflection of the average trading price of the SPY for the past 50 days.   It's a measure used by many institutional investors to establish a trend direction.  They often consider the angle of the MA (in this case Upward) and they consider it's correlation to other moving averages.  Still other technicians take a contrary view to this event, given the amount of days the SPY has already been trending upward, and would see this even as a possible weakening sign due to exhaustion of the upward trend.

In todays scenario the convergence of price and the 50 day MA will be seen by some as a price supportive event, though others may view it as the first attempt to break through the MA in an ultimately bearish trend.

Moving averages are often used in a type of analysis termed "correlation analysis". There are hundreds of indicator types, but the Moving
Average is one of the early classics.  The earliest indicators would be the Trend Line and Support/Resistance.

Prior to the 1990's technicians had to draw their own charts on paper. Today, computer generated charts make plotting indicators, a far simpler prospect.  In fact today, many algorithm trading programs use these type of indicators to generate automated trading signals and even automatic trade executions.

This article is not a recommendation to trade, and reported for educational purposes only. Please conult your financial advisor before making any trading decisions.

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