Thursday, May 22, 2008

Barron's Online clarification

Wednesday's column talked about the 50-200-day moving average crossover system but failed to clarify that exponential moving averages were used. Simple averages were whipsawed in 2004 and 2006.

For what it's worth, the crossover system remains in bear market mode.

4 comments:

Equalizer said...

Maybe I'm not reading the Barrons column correctly, but it states that 50 crossed 200 EMA ONLY twice-October 2000 and June 2003. Of course graph shows Dec 2007 as another crossover, but text doesn't directly mention it. Maybe this is so obvious to writer, but for uninformed this is a little vague and needs clarification. Is there any difference between up crossing and down crossings? Thank you

jimbobboy said...

Glad I wasn't the only one confused. I too saw other crossovers looking at the charts on my stockcharts.com account. I did wonder if "exponential" might show different results. I'll have to go back and test this. Apparently it does. I follow Michael Kahn's postings on Barrons.com and occurs to me I don't recall seeing his columns in the Barron's itself.

Quick Takes Pro said...

Equalizer,

You are right - there is no specific mention of the downside cross in Dec. My mistake. I thought it was implied.

The only difference in the up and down crosses is the trend change direction they portend. In other words, no.

Quick Takes Pro said...

Jimbobboy,

While I am associated directly with Barron's Online, I have been in the magazine several times over the years - the last (I believe) being an adjunct to a Jim Rogers column on a gold bull market that can last for a long time.

On occasion, the magazine runs excerpts of my online column although that, too, has not been the case for a while.

- mnk