Email of the day on moving average settings in the Chart Library.
Comment of the Day

May 20 2022

Commentary by Eoin Treacy

Email of the day on moving average settings in the Chart Library.

Eoin, When I watch your daily videos, it seems the 1,000-day moving average of Nasdaq 100 is about 11,700. When I look at this on your chart library though, it seems to be nearer 10,600. Which is it? And why the difference? Thanks

Eoin Treacy's view

Thank you for this question which pops up from time to time. The charts I use default to exponential moving averages. The system default on the Chart Library is for a simple moving average. You can change it to an exponential version by following these instructions:

Click on “Charting” which is located in the toolbar above the chart.
Click on the Analysis drop-down and select Moving Average
Tick the box for Exponential.
Hit Apply.

If you want to save that as your default setting

Click on Charting again.
Click on Save, located at the top of the menu box.
It will prompt you to give your new chart preset template a name.
Click on OK.
Refresh the page.

Your new chart configuration will now be saved to your Chart drop down menu in the top right.

Here is a video to show you how. 

Perhaps the most important point to remember is that it does not matter which version of the moving average you use. I prefer the exponential average because it gives some additional weight to more recent readings. However, that does not change the fact that wide overextensions relative to the MA increase the risk of a reversions to mean. Likewise, reversions toward the mean suggests we should be looking for catalysts to reignite bullish interest.

At present central bank tightening is the biggest obstacle to a sustained rebound so a reversal of policy is the most obvious catalyst.

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