Will 50-Day Moving Averages Hold Up This Time? (DIA, SPY, QQQQ)

Yesterday’s major rally may have brought on more than just the garden variety panic buying seen in prior panic buying waves.  So far we have profit taking being seen early on, but the DJIA and the S&P 500 crossed above their respective 50-Day Moving Averages in yesterday’s move.  This is more easy for traders to track in the major ETF’s, so we ran these for the DIAMONDS Trust (NYSE: DIA), SPDRs (NYSE: SPY), and the PowerShares QQQ (NASDAQ: QQQQ).

We flirted with and went above the 50-day moving averages right at the end of December 2008 and held those for a few days in January 2009.  We all know what happened after that.  Crossing over these does not assure additional gains, but with a pullback happening early this morning these 50-day respective moving averages might be the key support levels that need to be tested.  And maybe retested.  Here are the key 50-day moving averages for the INDEX levels first then for the underlying ETF’s of each in order:

………. 50-DAY  YESTERD.
DJIA… 7649.35    7775.86
DIA…..   76.12         77.76
S&P5… 796.06      822.92
SPDR…   82.22        79.27
NDX…. 1176.88     1259.81
QQQQ..   28.91          30.90

What is interesting is that the NASDAQ 100 index has been above the 50-day moving average now for 5 trading days despite some intra-day testing.

If you want to know why we did not include the even more important and more determining 200-day moving averages, the reason for that is rather simple.  Those 200-day averages are so much higher that they would be the signal of a new world if you took out the last two weeks.

Jon C. Ogg
March 24, 2009