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Strategies & Market Trends : Rolling Averages, Their ins and outs and ups and downs -- Ignore unavailable to you. Want to Upgrade?

To: nasdaqian who wrote (9)	12/28/1999 6:48:00 PM
From: Drygulch Dan	Read Replies (1) \| Respond to of 31

That is indeed the concept. However using a three curve chart one has several gaps to look at. In this particular case, using either the 50/100/200 and even more so for the 35/50/85, the gap that I would watch would be the historically widest gap. The one that has gapped the most in past moves. Using the 35/50 pair crossover as the buy/sell trigger and the crossing over of the 35 and 50 across the 85 as the confirmation that the long term move is underway. Then in this particular chart the gap to watch would be the 50/85 gap, as it widens then look for a closing of the 35/50 gap, hoping to catch it early enough to still have volume buying happening. The other gap to watch of course is the gap between the price and the fastest moving average. It should widen towards the time of peak movement, up or down. This is but one chart's view. There are other time periods to look at of course as well as other technical and fundamental factors to consider in reaching a major buy/sell decision. Regarding ORCL, you are right, I'd probably make some bonehead decision like, "OH! El Nino is over, Larry will probably need to buy a new set of light-air racing sails for the yacht, better sell ORCL..." and sell it at the low for the year. In looking at orcl (for the first time, I might add), I find myself hunting around for a set of moving averages that might start talking to me. Looking at the 6-month chart I like the 5/10/20 curves as a first stop. They at least tell you its safe to go in the water. Looking at the 1-year chart I see the 10/20/40 curves kind of give the same effect. There is some whipsawing as the flats progress. I'd want something else to confirm using these for getting out. Too many headfakes. Using the 50/100/200 on the long term orcl chart, it would have put us in back in 1992 and would have kept us from getting whipped out in 1998, but we wouldn't care cause we'd be on the beach at Bora Bora right now wondering if our lackey's were handling our wealth with the same prescience and utter genius that we always applied to it.