XTR – Fund Managers Average

Also called as the “FUND MANAGER’S AVERAGE”, this is one of the most important indicators for measuring participation. As a general rule, investors, institutions and big players feel comfortable investing in a stock or a market when the asset is trading above it’s 200-day MA. When the stock or market falls below the 200-day MA, they are less likely to put new money to work in that particular stock or market or to defend their position if the stock or market drops.
The 200-day moving average is a long-term smoothing of price movement, and a stock’s price in relation to this moving average is a good indication of its long-term trend. For example, when the price index moves below the 200-day moving average, we can assume the long-term trend is down until the price index moves back above the 200-day moving average.
There are no automatic assumptions that can be made about this index. For example, just because 80% of stocks are above their 200-day moving average, there is no guarantee that a downside reversal can’t happen. In fact, once the index has moved to an extreme end of its range, it’s a good idea to be alert for a change in direction, because the market improves until it is as good as it can get, then it starts to deteriorate. Conversely, as soon as things are as bad as they can get, they start improving. So this is the behavioral pattern that creates an edge for the fund manager, stock pickers and traders.
This XTR issue analyses the BVB indices and stocks in relation to their 200 Day moving average. The results are not surprising. More than 80% of the market is below its respective average. Now this means that apart from the negativity that one can expect, it makes sense to be alert for a change in direction. Above this we have a few stocks that are above the 200 day moving average. We also back tested a long – short model for the three indices and have illustrated the results in the report.
The report also carries an update on the XTR 21 index, which for second week in a row has found its place among the other indices. There is a complete capitalization comparison, index comparisons, updated stock and sector allocations, intermarket sectoral performances and XTR 21 week over week observations.
To read the latest XTR issue write to us for a free trial today or download the report from REUTERS KNOWLEDGE, YAHOO FINANCE, THOMPSON ONE or THOMPSON RESEARCH.