Today is the last trading day for the last bar. Click to make bigger. I would like you to understand this because it will help you a lot for the future. But it is difficult to teach. One bar is one weeks trading. At the top of this weeks bar you see the green 21 week MA holding down the top. On every bar you see the closing sign to the right. If you add 21 closing points from the left you will get a number.( Observe the current week is not included - there are 22 bars on the chart) Divide that number with 21 and you will get the exact place where the 21 MA is now over the current bar. If you look at the first bars close and see that it is higher than the current trading point you know that the 21 MA is down. If a rally should start and go above the first bars close the 21 MA will go up. That means you see the 21 trend by comparing the 22 close with current price always. Next Monday we will have a new bar and then the second bars close should be compared to the trading line. You see that the next 6 closes from the left get higher and higher pushing the 21 MA lower and lower by the week if trading is below the closes.
So the 21 MA keeps the trend down. Now the 8 MA function exactly the same. If you understand what I mean your knowledge has skyrocket in technical analyzing. This is my own invention from 1984. You look at the eight bar back from the current ( do not include the current bar) and you see that the close is below current trading which means that the 8 MA is up. The coming 2 weeks will be the same. This means that the 8 MA will rise and the 21 MA will fall. The trend will move between these two MA's until a cross occurs or the 8 MA turns down before a cross. A cross means bull market and and no cross bear market.
All MA's functions the same way. From 1 minute chart to yearly charts. Give it a try.
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