Saturday, November 21, 2015

Determine Market Trend (20 Nov 15)

Bull Market, Pullback, Correction and Bear Market
(1)     Pullback: -5% off 52W High   (2) Correction: -10% off 52W High   (3) Bear Market: -20% off 52W High

Benchmark
Symbol
% off 52-Week High
Market Trend
Nasdaq 100
QQQ
-0.86%
Bull Market
S&P 500
SPY
-1.30%
Bull Market
Dow Jones 30
DIA
-1.71%
Bull Market
Russell 2000
IWM
-8.87%
Pullback
Traders who strive for consistency—their goal is to make money in all market environments.  Knowing whether you are in Bull Market, Bear Market or a Flat Market is equally important and key in assessing the potential for your trade.

Long Term Trend
The “big dog” of moving averages is the 200-day moving average.  If the index is trading above that level, the long-term trend is considered up; generally, the 200-day moving average is seen as a proxy for the long-term trend.

Benchmark
Symbol
Price
200-DMA
Market Trend
Nasdaq 100
QQQ
114.48
107.97
Uptrend
S&P 500
SPY
209.31
205.16
Uptrend
Dow Jones 30
DIA
178.06
174.04
Uptrend
Russell 2000
IWM
116.81
120.12
Downtrend
In an up-trending market, I will lengthen holding times and give my holdings more room to run.  In a wide trading range or a down-trending market, I use short holding times and grab profits quickly.   

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