[Mish's Daily] How to Effectively Use a Moving Average Confirmation Rule

June 21, 2021 How to Effectively Use a Moving Average Confirmation Rule Written by Forrest Crist-Ruiz Friday, the major indices including the small-caps Russell 2000 (IWM) and S&P 500 (SPY) closed underneath their 50-Day moving average. However, on Monday, both reversed and ended the day above their 50-DMA. With Friday's weak price action, any bearish traders who decided to short these indices based on a break of the 50-DMA would now be underwater in their trades. For this reason, we follow a simple rule to confirm price breaks under or over major moving averages. The rule is to wait for the price to close for 2 consecutive days under/over the 50-DMA. Often price can temporarily dip or clear a pivotal MA before reversing. Please click the link below to read more, plus get key levels for the equity indices, and actionable trading ideas in sector ETFs Bye for now, Mish and Forrest MICHELE SCHNEIDER Director of Research & Education MarketGauge P.S. When you're ready, here are 3 ways I can help you reach your trading goals… Stay one step ahead of the market with my free report, "Markets, Megatrends, and Trading Insights", and my daily market analysis, "Mish's Daily". Get the foundational building blocks of my trading strategies from my book, Plant Your Money Tree: A Guide to Building Your Wealth, and accompanying bonus training. Trade with me and take your trading the next level by following my real-time trading ideas as a member of my premium service, "Mish's Ultimate Trading Program". GET MORE ACTIONABLE TRADING IDEAS AND INSIGHT BELOW WEEKLY MARKET OUTLOOK The Fed's FUD (Fear, Uncertainty, Doubt) BIG VIEW (updated daily) Sectors & Markets On the Move! TRADES AND TUTORIALS How To Identify & Trade A Reversal With 'Real Motion'

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