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The displaced or moving average shift indicator

Moving averages remain a popular technical indicator deployed by many traders and investors as a trading tool to help in their decision-making process. However, the moving average remains a lagging indicator and, as such, tends to generate buy or sell signals too early or late.

One attempt to improve the moving average effectiveness is to shift a moving average or displace it on the chart by a certain amount of time to the left or right of the current date. The objective is to help improve the buy and sell signals by minimizing the historical lagging tendencies associated with a typical moving average indicator.

The displaced moving average is no longer a lagging indicator. It becomes a leading and powerful tool when accompanied by other technical indicators and trading disciplines. Shifting the moving average can better align or fit the price to the future trend; instead of forecasting where it has been trading in the past. The displaced moving average tends to show fewer crossover signals, robust buy and sell signals, fewer price fluctuations, and better timing of turning points.

Shifting the 50-day ma back by 25 trading days can better center the moving average for cycle analysis. A centered moving average helps to position the trend to find the ideal market cycles. It is popular with Keltner Channel for cycle analysis. The centered channel cycle lows and highs can help forecast the timing of future low or high cycles.

Shifting the 50-day ma forward by 25 trading days/periods and overlaying the SPX chart by the Bollinger Bands study by 25 trading days/periods can help a trader or investor better determine where the index will reside in a specific point in time (9/13/23).


As with many technical indicators, convergences of technical indicators and disciplines toward similar levels can help locate and estimate pivotal support or resistance levels.

The 50-day ma shift of 25-days and the Bollinger Bands study show the following interesting technical developments:

(1) Extending the 50-day ma by 25 days places the moving average at 4,421.86 by 9/13/23.

(2) The 50-day ma is trading at 4,421.86 (8/8/23), or identical to where the 50-day ma will likely trend to in 25 days (9/13/23). Interestingly, this implies 4,422 may be pivotal current support and significant support 25 days from today.

(3) The extension of the bottom of the Mar 2023 uptrend channel is currently at 4,406. When extrapolated to 9/13/23, it suggests an SPX level closer to 4,571.

(4) The top of the Bollinger Bands is trading at 4,464. At the current pace, it can rise to 4,602 in the next 25 days. It suggests 4,571-4,602 may become pivotal near-to-medium-term resistance.

(5) The top of the Mar 2023 uptrend channel is trading at 4,677 today. When the trend extends 25 days, it can rally to 4,845.

(6) The top of the Oct 2022 uptrend channel is currently trading at 4,642. The extension of the trendline in 25 days implies an SPX level closer to 4,721. Under a bullish market environment, SPX can challenge its all-time high (4,818.62 - 1/4/22).

Although a displaced moving average is a simple technical indicator, it can help improve a trader or investor's decision-making process by better identifying potential support and resistance levels.


Source: Chart courtesy of StockCharts.com

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