All Ordinaries Index - close below 200-day moving average lacks predictive quality

All Ordinaries Index - close below 200-day moving average lacks predictive quality. We note that yesterday the All Ordinaries Index closed below its 200-day moving average. For many casual observers a close below such a revered technical level is inordinately negative for Australian equities. Well like most indicators (technical or fundamental) sometimes they work but for the most part the outcomes are consistent with random. In this case, a fresh close below the 200-day moving average (at least 20-days between each signal to reduce noise) was followed by returns that you would not hang your hat on. Since 1980, 20-days post a fresh break below the 200-day moving average the All Ordinaries Index produced an average return of -0.31% with 21 positive & 17 negative periods. Full data analysis & tables can be viewed at (VIEW LINK)