Predictable price behaviors occur around the four major moving averages, 20, 50, 200 and 500 day simple moving averages.
On May 26th, 1896 Charles Dow introduced the industrial average, the Dow Jones 30. Since then there has been a repeatable and predictable price behavior pattern around the four major moving averages
The key is understanding the historical pattern and see if they can give us any clues.
In last 3 sell off, we have seen that SPX has respected its 50 day SMA before making the move down. With today's sell off we have not yet seen the test of 50 day SMA, may be tomorrow we see the test of 50 day SMA before any bounce or any further sell off.
Lets tread one day at a time..
With this kind of price action, I am not buying any ETFs or any stocks.. Staying in Cash is worth it..
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