/biz/ - Business & Finance

>>20998317
Exponential Moving Average. In this instance, it is an average of the previous 200 days' prices but weighted so that more recent prices have a larger effect. The blue line is the 200 ema superimposed over SPY during the covid-19 drop. You can see how much of the draw down you would have avoided had you gotten out when the price went beneath.
The 200 ema like any moving average, is not perfect but it's good to have in the toolkit like a lot of traders do
>>20998447
Like the write-up said, Yahoo still went up almost 80x despite the high PE. Use the 200 moving average and get out as it's a much more reliable indicator of over-value than PE is.