Changing of the guards

You might remember this dope track 'Changing of the Guards' from the Season Finale of Silicon Valley.

Ok, so what's the point?  The 200 day moving average is typically most renowned long term average in technical analysis books.  You see it everywhere.  

Recently however, the 100 day moving average has been the KEY level where mass psychology comes in play.  

Take Apple for instance.  This week's test of the 200 day moving average was it's first in two years.  Looking back, it appears the 100 day moving average area has been the zone to watch.  Does that clean break down suggest Apple has topped?  Considering other factors including the head and shoulders pattern, yes.  

Shifting to the broader market we see market participants have tended to become fearful right around the 100 day moving average.

For whatever reason our mass psychology has been wired a little tired than the technical analysis books suggest.  Is this just a sign of the uber bull market that hasn't seen a 10% correction in now 4 years?  data via @RyanDetrick

$SPY now up to 48 months without 10% correction. Last 2 times got this far went 8 and 38 more without it happening. pic.twitter.com/cCSiVwZoIe

— Ryan Detrick, CMT (@RyanDetrick) August 2, 2015

That's a great question, but unknowable.  The main take here is keep an eye on that 100 day moving average area in your widely held positions, it'll tell you plenty.

Trade 'em well!