I just finished reading a premium post over on ZeroHedge (which seems to toggle from bullish to bearish on a daily basis in recent weeks) which made a big stink about how this was a great time to buy stocks, because they have found support at the 200-week moving average. Well, it’s true, ever since the printing presses went white-hot following the financial crisis, the 200-WMA has indeed been an important bounce zone.
I would hasten to point out, however, that in more normal times, when bear markets were actually allowed to occur, stocks had absolutely no problem collapsing beneath the 200-WMA and regarding it as resistance instead of support. We haven’t had an honest-to-God bear market since 2008, so if you look at the era prior to the insane Fed, you’ll see quite plainly that the 200-WMA is no iron wall. Just sayin’.
