Trendlines and Moving Averages...

Although I usually use trendlines to see the bigger picture and to trade with the trend, some people prefer short term moving averages, especially to help them trade intraday...and they both can be very useful.

Below is a daily SPY chart from the beginning of 2012 which shows 3 short term simple moving averges...the 10day, 20day, and 50day. The bigger trend (trendline not shown) is slightly lower, but its easy to see the 20day moving average has provided some very nice buying opportunities along the way. Actually yesterday was a great buying opportunity intraday at the 20day sma sitting near 139.08 (lows of the day were 139.09!!!).

Lesson - dont rely on just one indicator or one way of doing things to trade the market. Use a variety of things and stick with the things that are working at that time. Right now in SPY, the 20day sma is working very well. Also, these things work, until they dont...so dont get married to a particular way of doing things. You have to be flexible in your approach.