An tSionna-Calculating Moving Averages.

One of the simplest ways to mark the beginning and end of the market's current phase is when it's 50 day moving average crosses it's 200 day moving average. A moving average simply averages the closing prices of the period in question and forms a continuous line. Investors use this 50/200 cross (sometimes called the Golden Cross) as an important tell on market direction. A 50 day average looks back about 2 1/2 months. A 200 day average looks back 10 months. Time is currently in the process of dropping the worst of the fall's decline as that is now farther back than 50 trading days on its moving average. Also as we've noted in the past we have now been basing for about tow months. We still have a lot of work to do regarding the 200 day as it is currently still averaging trading numbers going back to late February. I took a stab at calculating when these two might cross if the market continues to flat line or base in its current trading range. These are the dotted lines you see pictured in the chart above. (50=green. 200=dark red) Assuming we mostly trade sideways then it's likely these averages don't cross until sometime in the summer. That means no new bull market is likely to begin until then. That would coincide with a late year pick up in market activity that many analysts are looking for. Note though this assumes that markets continue to base for the next 6 months and don't move rapidly higher or lower. Then we would have to recalculate. Stay tuned.