What Is the 200-Day Moving Average and Does It Work?
Direct answer
The 200-day moving average on the S&P 500
The 200-day moving average (200-DMA) is the average of the last 200 daily closing prices, recalculated every day, which smooths out noise to show the long-term trend. Many investors treat a price above it as an uptrend and below it as a warning. In our calculation on S&P 500 data, the index closed above its 200-day average on about 81% of trading days from August 2017 to November 5, 2026, and crossed it 56 times, so the line is a trend filter, not a precise signal.
- 200-DMA = average of the last 200 daily closes
- S&P 500 closed above it on about 81% of days since August 2017 (FRED data)
- 56 crossings in that period, many of them false signals within days
- Latest: S&P 500 7,353.73 vs 200-DMA about 7,323 on November 5, 2026
Financial TV loves the 200-day line: "stocks broke below the 200-day" is treated as news. It is a useful tool, but the data show it is far noisier than the headlines suggest.
What people on X are asking
In September 2026 one investor asked why the 200-day moving average works at all, recalling long-run market data books. In October another post asked why a stock would not keep falling while it is clearly below the 200-day moving average, and offered the rule "never buy anything below the 200 DMA", which is the poster's rule, not a proven law. We test what the line has actually done on the S&P 500.
The fact-checked answer
The calculation. Add the last 200 daily closing prices and divide by 200. Tomorrow, drop the oldest and add the newest. Because 200 trading days is roughly ten months, the line moves slowly. The point is to smooth out day-to-day noise so the underlying trend is easier to see.
UXS chart
S&P 500 and its 200-day moving average
S&P 500 daily close: latest
7,353.73
November 5, 2026
200-day moving average: latest
7,322.74
November 5, 2026
Year by year: S&P 500 daily close
Computed by UXS from the same data as the chart. Tap a column header to sort. * = year to date (latest data November 5, 2026).
| 2026* | 7,353.73 | +7.4% | 7,818.93 | 6,343.72 | 7,322.74 |
| 2025 | 6,845.50 | +16.4% | 6,932.05 | 4,982.77 | 6,286.45 |
| 2024 | 5,881.63 | +23.3% | 6,090.27 | 4,688.68 | 5,551.62 |
| 2023 | 4,769.83 | +24.2% | 4,783.35 | 3,808.10 | 4,353.77 |
| 2022 | 3,839.50 | -19.4% | 4,796.56 | 3,577.03 | 4,008.38 |
| 2021 | 4,766.18 | +26.9% | 4,793.06 | 3,700.65 | 4,382.65 |
| 2020 | 3,756.07 | +16.3% | 3,756.07 | 2,237.40 | 3,234.56 |
| 2019 | 3,230.78 | +28.9% | 3,240.02 | 2,447.89 | 2,967.85 |
| 2018 | 2,506.85 | -6.2% | 2,930.75 | 2,351.10 | 2,746.00 |
| 2017 | 2,673.61 | – | 2,690.16 | 2,425.55 | 2,482.18 |
How often the index was above it. From the first full 200-day average in August 2017 to November 5, 2026, the S&P 500 closed above its 200-DMA on about 81.2% of trading days. That is what you would expect in a market that rose most of the time.
How often it crossed. We counted 56 crossings of the close through the line in that period, roughly six a year. Many were whipsaws: for example the index went below on March 10, 2025, back above on March 24, below again on March 26 and above on May 12. Each of those would have triggered a trade for a strict rule-follower.
Recent S&P 500 crossings of its 200-day moving average
Computed by UXS from FRED SP500 daily closes. "What followed" describes the data afterwards and is not a prediction. Tap a column header to sort.
| Oct 25, 2023 | Below | Back above within about a week |
| Nov 2, 2023 | Above | Stayed above until March 2025 |
| Mar 10, 2025 | Below | Brief recovery, then a deeper fall into April |
| Mar 24, 2025 | Above | Lasted two days |
| Mar 26, 2025 | Below | Index fell further before recovering |
| May 12, 2025 | Above | Stayed above until March 2026 |
| Mar 19, 2026 | Below | Back above in under three weeks |
| Apr 8, 2026 | Above | Above as of Nov 5, 2026 |
Why it can work as a filter. Long declines, such as 2008 or 2022, happen below a falling 200-day average. A rule that holds stocks only above the line tends to sidestep part of the worst bear markets, at the cost of many small losses from whipsaws and missing sharp rebounds. Whether that trade-off pays off depends heavily on the period and on trading costs and taxes.
Moving averages are lagging indicators. They describe what has already happened. Compare it with momentum measures in what RSI is and what MACD is.
Moving-average crossovers are the basis of MACD; see is a MACD crossover reliable.
Trend filters and new highs often appear together; see buying at a 52-week high vs waiting for a pullback.
Horizontal levels work alongside moving averages; see why support turns into resistance after a break.
Decision helper
| How you might use the 200-DMA | Strength | Weakness |
|---|---|---|
| Trend filter (only buy setups above it) | Keeps you out of long declines | Misses early rebounds |
| Exit rule for an index fund | Simple and mechanical | Whipsaws, tax events in taxable accounts |
| Support or resistance level | Many traders watch it | It is an average, not a wall |
| "Golden cross" with the 50-DMA | Popular signal | Very late; often after big moves |
Checklist before using a 200-day rule
- Decide which price: daily close, not intraday.
- Add a buffer (for example 1–2%) or a confirmation period to cut whipsaws.
- Test the rule over several decades and markets, not one chart.
- Include costs and taxes in any test.
- Write down what you do on a cross before it happens.
Common mistakes
- Treating a single close below the line as a sell signal for everything.
- Assuming the line will "hold" as support.
- Using it on thinly traded stocks where price noise is high.
- Ignoring that the line itself can be rising while price dips below it.
FAQ
What does it mean when a stock is below the 200-day moving average?
Its price is below the average of the last 200 closes, which many traders read as a weaker long-term trend. It is not a guarantee of further falls.
Is the 200-day moving average a good indicator?
It is a reasonable trend filter but a poor timing tool: the S&P 500 crossed it 56 times in about nine years.
Why 200 days?
It is a convention, roughly ten months of trading. Other periods (50, 100) behave similarly but react faster.
What is a golden cross?
When the 50-day average rises above the 200-day average; a death cross is the opposite. Both lag price.
Is the S&P 500 above its 200-day average now?
Yes: on November 5, 2026 it closed at 7,353.73 versus a 200-day average of about 7,323 in our calculation, just above it.
Does the 200-day work for crypto?
People apply it to bitcoin, but bitcoin's larger swings create even more crossings; see the bitcoin price history.
Sources
Facts checked November 10, 2026. X posts are cited as evidence of the question, not of the answer.