Chris Kimble starts off the business day by calling our attention to the 200-day Exponential Moving Average (EMA) in four broad indexes. An EMA differs from a Simple Moving Average (SMA) is that it assigns more value or weight to the most recent data. Thus, in a trending market, EMAs are generally faster to trigger signals.
Chris explains: The 200-day EMA line remains in the news as markets continue to trade fractionally above and below this popular tool.
Now for the first time since 2007, this important EMA line is starting to roll over and have a downward slant to it.
This in and of itself is not a huge deal, yet when you combine falling resistance and the potential of lower prices at the right shoulder, the markets not being able to get above a "falling 200-EMA" line takes on a new level of importance.
