So, you’ve been investing for a while. You’ve made some wins, taken some losses. Maybe you’re even growing your net worth overall. And you have a general sense of when things are going well in markets, but you don’t have real analysis to back it up…

…and when people start talking about 200-day simple moving averages (SMA) and golden crosses (or death crosses), you just skim to the end of the post to see if they’re saying to buy or sell.

OR, maybe you’re deeply entrenched in technical analysis, but you’re so wrapped up in the Fibonacci sequences and 4D chess trading on derivatives that you could use a reminder of how effective the 200-day SMA can be.

Either way, today’s edition is for you.

In today's edition:

📈 Why the 200-Day SMA Is so Important
✅ Name a More Iconic Duo: 50-day SMA + 200-day SMA
⚠️ How Simple TA Can Save Your Portfolio
🧐 Real-World Examples of the 200-day SMA

Let’s begin.

In partnership with Death & Co.

On New Year’s Eve 2006, Death & Co’s opening night, its signature cocktails cost $12. Now Death & Co is offering that pricing for life to select investors.

But the real opportunity in owning Death & Co stock isn’t just the cocktail price, it’s sharing in the company’s growth potential.

They attract 10,000+ weekly bar visitors and project to make over $20M this year. And that’s just the start. They project revenue will grow 5.5X in just four years.

The award-winning hospitality brand is currently opening new bars and hotels in major US cities and international locations, with their newly debuted boutique hotel in Savannah attracting national media attention.

As a thank you for joining their investor community, Death & Co is offering exclusive benefits to shareholders, including investor happy hours, priority reservations, $12 cocktails for life, and more.

But the investment window ends on October 30, so you don’t have time to wait.

Become a Death & Co shareholder while you can.

_{This is a paid advertisement for Death & Company’s Regulation A offering. Past performance is not indicative of future results. Please read the offering circular at invest.deathandcompany.com.}

Please support our partners!

Simply put, the 200-day simple moving average is just the average price of a stock over the previous 200 days. And if you watch how that average moves over time, you get a good idea of the trend of an asset (whether it’s positive or negative).

If a stock’s price is above its 200-day SMA, that stock is generally considered to be in an uptrend (and that’s when analysts suggest buying most of the time). If the price goes below the 200-day SMA, people say it’s in a downtrend (this is when a lot of analysts say to sell).

Pretty simple, yes? You can find 200-day SMA indicators on pretty much every website that has stock charts, like Trading View (not sponsored, just a great tool).

Example of the 200-day SMA in action from May of this year:

Here, Shay pointed out that $QQQ (an innovation-focused ETF) looked like it was about to break above its 200-day moving average in May this year. That’s significant because it would indicate a “trend reversal” from downtrend to uptrend.

Why 200 days specifically? Well, you don’t have to use that particular time frame.

You can do much shorter moving averages (21 days, 100 days) if you want to make short term trades, or much longer ones (250 days, 500 days) for longer-term investments.

The 200-day SMA is considered the golden standard for long-term stock trends, though, because it contains enough data points to filter out a lot of short-term noise in a stock’s price movement while not including so much data that you can’t see clear trends emerging.

The 200-day also serves as a way to identify key resistance and support levels for a stock. When price is above the moving average, it serves as support (i.e., a price level that will be somewhat difficult for the stock to fall through). When price is below the moving average, it becomes resistance (i.e., a price that bulls will have to work hard to break through.

So, when we talk about trading ideas like this, all we can go off of is past data. So let’s look at what META’s 200-day SMA has done over the past 5 years:

The 200-day moving average is the blue line. You can see that at different times, it’s either above or below the stock’s price.

Generally speaking, just by looking at the trend lines here (not even doing any calculations), you can see that:

These are obviously generalizations, not absolute truths, but can you see how simple it is to see when a stock might be over- or undervalued based on the 200-day SMA?

Of course, this isn’t financial advice, and we’re not financial advisors, just sharing information that’s publicly available. It’s just shocking how few people use these basic analytics in their trading.

So that’s the 200-day SMA by itself. Pretty useful.

But the 200-day SMA becomes extremely useful when you combine it with another technical indicator.

So, ever heard of the terms “golden cross” and “death cross”?

These are super simple technical indicators that can tell you a lot about where a stock is at (and where it might go next). And they specifically involve the 200-day and 50-day SMAs.

The 50-day SMA is the same exact thing as the 200-day SMA, just over a shorter time frame (obvious). Possibly less obvious: the fact that the 50-day average covers a shorter time frame means that it’s more sensitive to a stock’s recent momentum than the 200-day.

What that means is that if a stock takes off, (example) growing by 100% over 25 days, that growth is going to affect the 50-day average WAY more than it will affect the 200-day average. So the 50-day will rise faster.

The same is true if price starts to drop; the 50-day SMA of a stock that loses half its value in a short time frame will drop way quicker than that stock’s 200-day SMA.

The reason any of that matters? Because we’re interested in where both of those SMAs cross over one another.

When a stock’s 50-day moving average drops below its 200-day moving average, that’s called a death cross.

This indicator may sound like a horrible thing that you never want to see in a stock, and it’s true that the death cross has preceded some bear markets; however, it’s not actually a bad thing.

According to Investopedia, historical data shows that death crosses are often followed by above average returns on a stock in the near term.

And according to Fundstrat, “the S&P 500 index was higher a year after the death cross about two-thirds of the time, averaging a gain of 6.3% over that span.”

That being said, it’s generally agreed that a death cross is often not a good time to be buying a stock. It may be best to wait for markets to turn around (i.e., wait to see if the S&P 500’s price gets back above its 200 SMA) before buying.

Now, on the other hand, when the 50-day simple moving average rises above the 200-day SMA, that’s a beautiful thing for a stock. It’s called a “golden cross”

The golden cross is what’s called a “bullish breakout pattern,” and it’s important because it means there could be a long-term bull market on the way.

There’s nothing magical about the golden cross itself though. It just tells us what’s already been happening: that for one reason or another, traders have started buying a stock more than they did over the previous 200 days.

All that means is that demand for that stock has risen and that bulls are beating the bears!

A key real-world example of this happened earlier this year. After the April tariff lows, in June of 2025, something amazing happened: against all odds, the S&P 500 and the Nasdaq 100 both formed golden crosses.

And what has happened since then? Well, since that day, the S&P 500 is up 11.39% and the Nasdaq 100 is up 14.27%. Not too bad for the #1 and #34 largest ETFs in the world (the bigger the ETF, the more money it takes to increase it by even 1%)

Again, we aren’t financial advisors, but we’ll lay out some simple points for how to utilize these SMAs in your trades:

Overall, we’re just attempting to give you some simple tools in your toolbox to understand stocks better (but in a simple way).

If you already knew all of this, let us know how the 200-day SMA has helped you (or hasn’t helped) in your trading journey.

We’d love to see you guys implementing this stuff in your own portfolios, but even if you don’t, we wish you the best on your investments, and we’re so grateful that you read our newsletter.

Have a great week!

That’s all for today’s special edition. We hope you got value from it. Reply and let us know if you did. 

Until next week,

— Brandon & Blake