Crossing the 50 Day Moving Average

Today the SP-500 blasted up through the 50 day moving average on volume above it’s 20 day moving average. I did some basic scans in Wealth-Lab to get an idea what price crossing the 50 day moving average might mean going forward. I created 2 scans - one with the 50 crossing with volume above the 20 day moving average and the other without. I tested to see what the returns were if you held for 5,10,20, and 40 days after the event. The entry would be at the open the day after the event.

I highlighted the highest return in each row with green and lowest in red. A couple things stand out.

1. 5 days out seems to significantly outperform after the cross with or without volume - for both types of crosses by at least 4x

2. About 2x average performance 10 days out

3. After 20 days the non volume cross begins to outperform - but still both beating average market returns

4. At 40 days the volume cross has lost ground on the other systems

To complicate matters my main index swing system is flashing a short for tomorrow …..go figure.

Have a Great Night!

Dave Johnson