The Key To This Stock Market Action-Trend Following

The key is to simply watch the 200 day exponential moving average.

Yesterday there was some real selling pressure in quality growth stocks. When the leaders get hit so does the rest of the stock market. This is what Trend following is all about. The line in the sand remains the 200 exponential moving average. In order for there to be any kind of a recovery, the index must get above this moving average with some conviction. The index is now 2.8% below this resistance level.

Now is not the time to be a bottom fisher unless you want to be a falling knife collector. This is what trend following is…Following the trend…Now the trend is down unless proven otherwise…