What is the 200-day moving average?

The 200-day moving average is the average closing price of a stock or index over its last 200 trading days, plotted as a single line. It smooths out short-term noise to show the long-term trend. It is the most widely watched trend line in the market, used to judge whether price is in a long-term uptrend (above the line) or downtrend (below it).

Is it bullish when a stock is above its 200-day moving average?

Generally yes — trading above the 200-day moving average is read as a long-term uptrend, the conventional "bull regime", and historically markets have spent most of their healthy periods above this line. It is a description of the current trend rather than a forecast, though: being above the line does not rule out a sharp pullback, and price sitting far above it can mean the move is stretched.

What does it mean when the S&P 500 falls below its 200-day moving average?

It means the index has dropped below its long-term trend line, signalling that the broad uptrend has weakened or rolled over. Historically, most of the market’s largest and fastest declines have happened below the 200-day, so it is treated as a caution flag. But many dips below the line have reversed quickly, so a single cross below is a reason to respect downside risk, not proof that a major decline is coming.

Does the 200-day moving average work for timing the market?

As a slow regime filter, modestly — its real value is keeping you out of the deepest drawdowns over a full cycle, not catching tops and bottoms. As a precise trigger it fails: it is late by construction and whipsaws badly in flat, range-bound markets, generating a series of small losing signals. It works best as one trend input among several, never as a same-day buy or sell button.

200-Day Moving Average: The Market’s Trend Line

Live 200-day trend — S&P 500 (SPY)

+8.4% vs 200-DMA

Above — bull regime

Bullish lean

As of 2026-06-12 · educational, not investment advice

See this alongside every signal on the market dashboard →

What it is

The 200-day moving average is the average closing price of the last 200 trading days — roughly the last ten months. Plotted as a single smooth line under the price, it strips out the daily noise and shows the long-term trend on its own. Almost every serious trend-follower and a great many ordinary investors watch this one line.

Its job is to answer a binary question: is the market in an uptrend or a downtrend? When price is above the 200-day line, the long-term trend is up — the conventional "bull regime". When price is below it, the long-term trend has rolled over. The line does not predict; it classifies the regime you are currently in.

The reason it gets so much attention is brutally practical: historically, the deepest, fastest drawdowns have overwhelmingly happened while price was below its 200-day average. Staying on the right side of this one line will not catch tops or bottoms, but it has tended to keep investors out of the worst stretches — which is a different and more achievable goal than calling the turn.

How it's calculated

You take the closing price of each of the last 200 trading days, add them up, and divide by 200. Tomorrow the oldest day drops off and the newest is added, so the line steps forward one day at a time. That is the entire calculation — a plain "simple" moving average, no weighting or smoothing tricks.

The signal itself is just the relationship between today’s price and that line: above or below, and by how much. A common refinement is to look at the gap as a percentage — price 8% above the 200-day is a stretched, extended uptrend; price hugging the line is a market that could break either way. Because the average is made entirely of past prices, it can only ever confirm a trend that is already in motion — that lag is the price of admission, not a bug you can tune out.

How to read it

Above the 200-day — bull regime

Bullish lean

Price is above its long-term trend line. The classic risk-on regime, and the side of the line where most healthy markets spend the majority of their time. Being well above it is strong but can also mean the move is extended.

Below the 200-day — caution

Bearish lean

Price has fallen under its long-term trend line. Historically this is where the large, fast drawdowns have clustered — a reason to respect downside risk, not proof a crash is next. Plenty of dips below the line have reversed quickly.

Right at the line — the whipsaw zone

Caution

Price is sitting on top of the 200-day, crossing back and forth. This is exactly where the signal is least useful — in a flat market it can flip from "above" to "below" and back repeatedly, each flip a small loss for anyone trading it mechanically.

When it fails

The 200-day average fails in a sideways, range-bound market. When price drifts horizontally for months, it crosses its own 200-day line again and again — a string of false "trend up / trend down" flips called whipsaws, each one a small cost. A rule that buys every cross above and sells every cross below will get chopped to pieces in a flat market while waiting for the next real trend.

It is also, by definition, late. Because the line averages ten months of past prices, you are never out near the top or in near the bottom — you act well after the turn. The honest framing is that the 200-day is a regime filter, not a timing trigger: it is good at telling you which broad environment you are in, and useless at telling you it is about to change. It earns its keep over a full cycle by keeping you out of the worst declines, at the cost of giving back a slice of every top and bottom.

See it for yourself

Play with moving averages

Trade a moving-average rule on a simulated market, then dial the trend strength from "strong trend" to "range-bound" and watch the same 200-day line go from a clean regime filter to a whipsaw machine.

Play with moving averages →

Frequently asked

What is the 200-day moving average?: The 200-day moving average is the average closing price of a stock or index over its last 200 trading days, plotted as a single line. It smooths out short-term noise to show the long-term trend. It is the most widely watched trend line in the market, used to judge whether price is in a long-term uptrend (above the line) or downtrend (below it).
Is it bullish when a stock is above its 200-day moving average?: Generally yes — trading above the 200-day moving average is read as a long-term uptrend, the conventional "bull regime", and historically markets have spent most of their healthy periods above this line. It is a description of the current trend rather than a forecast, though: being above the line does not rule out a sharp pullback, and price sitting far above it can mean the move is stretched.
What does it mean when the S&P 500 falls below its 200-day moving average?: It means the index has dropped below its long-term trend line, signalling that the broad uptrend has weakened or rolled over. Historically, most of the market’s largest and fastest declines have happened below the 200-day, so it is treated as a caution flag. But many dips below the line have reversed quickly, so a single cross below is a reason to respect downside risk, not proof that a major decline is coming.
Does the 200-day moving average work for timing the market?: As a slow regime filter, modestly — its real value is keeping you out of the deepest drawdowns over a full cycle, not catching tops and bottoms. As a precise trigger it fails: it is late by construction and whipsaws badly in flat, range-bound markets, generating a series of small losing signals. It works best as one trend input among several, never as a same-day buy or sell button.

Keep going

Educational, not investment advice. No signal predicts the future, and no single reading is a buy or sell instruction — this is a structured way to understand what each timing signal is actually telling you.

The 200-day moving average — the single line that defines the regime