Quotes from Legends: Moving Average Price

Moving Average Price (n periods)
Pg 246-247: Fixed interval of time.....For each new trading day, the oldest price is dropped and the most recent price is added to compute the average. Moving averages fluctuate far less than daily prices. When prices are rising the moving average trails the market and, technical analysts claim, forms a support level for stock prices. When prices are falling, the moving average is above current prices and forms a resistance level. Analysts claim that a moving average allows investors to identify the basic market trend without being distracted by the day-to-day volatility of the market. When prices penetrate the moving average, this indicates that powerful underlying forces are signaling a reversal of the basic trend.....One of the early supporters of this strategy was William Gordon, who indicated that, over the period from 1897 to 1967, buying stocks when the Dow broke above the moving average produced nearly seven times the return as buying when the Dow broke below the average. (William Gordon, The Stock Market Indicators, Palisades, NJ: Investors Press, 1968).....Whenever the Dow Jones Industrial Average closed at least 1 percent above its 200-day moving average, stocks were purchased at least 1 percent below its 200-day moving average, stocks were sold.
Pg 249: Over the entire 107-year history of the Dow Jones average, the 200-day moving average strategy had its greatest triumph during the boom and crash of the 1920s and early 1030s. Investors following the 200-day moving average strategy would also have avoided the October 19, 1987 crash, selling out on the previous Friday, October 16.....From 1885 through June 1997, the 11.51 percent annualized return from the timing strategy beat the return on the holding strategy return of 9.8 percent per year.....The major gain of the timing strategy is a reduction in risk.....This means that on a risk-adjusted basis the return on the 200-day moving average strategy is quite impressive.
Pg 252: A moving average is simply the arithmetic average of a given number of past closing prices of a stock or index over a fixed interval of time......Recent econometric research has shown that simple trading rules as 200-day moving averages can be used to improve returns......But this strategy should be monitored closely......In October 1987, the Dow fell below its 200-day moving average on the Friday before the crash and gave a sell signal. But if you failed to get through to your broker that Friday afternoon, you would have been swept downward in the 22 percent nightmare of Black Monday.
Stocks for the Long Run by Jeremy J Siegel, McGraw Hill.

Pg 13-14: Over the years I've found that a 30-week moving average (MA) is the best one for long-term investors, while the 10-week MA is best for traders to use. A 30-week MA is simply the closing price for this Friday night added to the prior 29 Friday weekly closings. Divide that figure by 30 and the answer is what's plotted on this week's chart. Stocks trading beneath their 30-week Mass should never be considered for purchase, especially if MA is declining. Stocks trading above their 30-week Mass should never be considered for short-selling, especially if the MA is rising. For a long-term investor, the ideal time to buy a stock is when it breaks out above resistance and also moves above its 30-week MA, which must no longer be declining. For a trader, who wants action, the ideal time to buy a stock is when it's already above its 30-week MA, when the MA is rising.
Stan Weinstein's Secrets for Profiting in Bull and Bear Markets, McGraw Hill.
Pg 106: Some stocks can be sold when they are 70% to 100% above their 200-day moving average price line.
(MAP decreasing) After a prolonged upswing, if a stock's 200-day moving average line of its price turns into a downtrend, consider selling the stock.
How to Make Money in Stocks by William J. O'Neil.