Over the period tested the average gain per day in the Nasdaq 100 was just under 0.09% ($90). As you can see, the market seemed to gain steam after crossing the 200-day moving average and strongly outperformed the typical period.
What if we add a filter to eliminate those times where it barely peeked across? I filtered to only look at crosses that finished at least 0.5% above the 200ma. Results below:
These results are even stronger.
How about if we also require that the NDX makes a good-sized move on the day of the cross? I used a 2% gain to test this. More results:
Whatever the reason, a move through the 200-day moving average has provided the NDX some extra fuel in the past. When the move was strong and decisive like Thursday, that made for even better results. A cross above the 200-day moving average isn’t a magic buy signal – but there are worse ones.
Image courtesy of DialBforBlog.