A signal given by one use of this indicator suggests that US stocks might continue to push lower, but economic trends-perhaps most notably if prices broadly start to cool down and the Fed doesn't feel it needs to raise rates as rapidly-have the potential to change that dynamic. Nevertheless, many active investors are wondering if the selling pressure could continue over the short term, or if stocks might find a bottom.įrom a chart perspective, a tool that you can use to watch for a continuation or change to the current trend is moving averages. Of course, a multiyear chart doesn't paint as pessimistic of a picture. Rising gas and other prices have increased the probability that the US central bank could keep raising interest rates to fight inflation (including the 0.75% hike on June 15), and that has played a big role in pressuring stocks this year. US stocks officially entered a bear market on June 13, after falling more than 20% from their most recent high. The most recent moving average crossover generated a sell signal.Īt this time last year, stocks were rolling en route to a 28% gain for US stocks (as measured by the S&P 500) in 2021.

Short-term buy and sell signals can be generated by crossovers of 2 moving averages.Moving averages are one of the simplest and most commonly used technical indicators.

200 ema settings