The long-term 3-month trend line (black is very neutral with daily prices staying near the average while never straying too far above and below the relatively straight line. It's actually pretty hard to see because of the other plotted lines showing more volatility. The 1-month and 1-week lines (blue and yellow respectively) cross each other quite frequently as they react to various gains and losses during the year. As the 7-day average crosses the 90-day average, the week or so following the cross reacts with similar sentiment. An intersection and dip predicted a week of losses while bullish behavior centered around the opposite. For the month of August, the Dow Jones failed to reach 30- and 90-day levels hinting at a bubble in the overall price index. In fact, daily price movements fail to retain 7-day moving average levels. An intensified trend could have been projected with the signals of widening gaps between these three moving averages and Chinses sentiment. This is how an investor can identify a trend with simple moving averages. By comparing the velocity over directional movements with the use of intersections, the sustenance of a trend can be verified. Let's look at SMAs for WTI now.
The WTI benchmark has two major crossover points at the beginning of July where an intensification of bearish behavior with earnings week projected dives in crude oil price. At that point, the chart shows the 7-day average dropping past the 30- and 90-day averages. About a week later, the trend is solidified and the 30-day market drops as well. From then on, daily price movements cross over the 7-day trend only three times. From this, we can assume that speculation has not changed much at all. In fact, because the 30-day trend line is so much lower than the 90-day trend, WTI long-term sentiment might be just as bullish. For some recovery or at least some hope for higher prices, investors should be watching for the 7-day trend to challenge the 30-day trend. The same should go for the Dow moving averages. Volatility, with large increases in any direction, will still average out to no gains and no losses, Speculation has no direction then. A quick evaluation of a week trend versus a month trend using simple moving averages can be a litmus test for sentiment. In the case of the recent crash, the next week of data will be important for 7-, 30-, and 90-day SMAs as intersections (or no intersections) could speak for sustenance of a trend or be evidence for a correction in inflated prices. This will be important for the Fed to watch as they continue to ruminate over rate hikes.