Exponential Moving Average (EMA)

This indicator is a 100 bar Exponential Moving Average (EMA) of the closing daily price.

Many market watchers follow this long-term average of market price (or long-term mean value).

Proponents believe that in a bull market, price remains above EMA100 and that seasonal retracements often come back to EMA100 before advancing again. Likewise, in a bear market, proponents believe price will remain below EMA100 and that seasonal retracements often come back to EMA100 before further down-moves.

As always you should see for yourself with your own analysis.

We also have another EMA (20 bar term) which we combine with the Keltner Channel.

Because it has a "look back" of 100 bars of data it has considerable phase lag (see Phase Lag Indicators).

However, it is widely followed and can be useful when combined with other indicators including the de Leon MRI.