Potential Golden Cross

The S&P 500 (SPX) 50 – day moving average (MA) is close to crossing above the SPX 200 – day MA.  This is called a Golden Cross.  Since 1998 there have been eleven Golden Cross signals that could provide insight into the coming months.

The daily SPX chart courtesy of Trading View illustrates its 200 – day and 50 – day MA. 

Stock markets generally rises at a slow and steady pace, therefore Golden Crosses typically signal bull moves that can continue for several months or even years.

When the 50 – day MA moves below the 200 – day MA its called a Death Cross.  Because stock markets usually decline faster than they rise, Death Cross signal bear moves of weeks and possibly months.  Some Death Cross signals will occur after a market has bottomed.  Note the most recent Death Cross signal on 03/14/22.  While this signal was effective in forecasting what turned out to be a seven-month bear phase, the day of the signal was a near term bottom.

The following are the SPX – Golden Cross signals since December 1998.  Eight of the signals had bull moves that peaked before at least a 10% decline and a Death Cross. 

07/09/20 to 01/04/22 – length 17 – months.

04/01/19 to 02/19/20 – length 10 – months.

04/22/16 to 01/26/18 – length 21- months.

12/22/15 to 12/29/15 – length 1- week.

{02/01/12 to 04/12/12 – length 3- months, decline of 10.9% with no Death Cross.  After the decline the bull move lasted until 05/20/15 a total length of 38 – months from 02/01/12 signal.}

10/22/10 to 05/02/22 – length 6- months.

06/23/09 to 04/10/10 – length 9- months.

09/12/06 to 07/16/07 – length 10 – months.

{11/05/04 to 05/18/06 – length 17 – months, decline of 8% with a Death Cross.}

{05/14/03 to 03/14/04 – length 9- months, decline of 8.75% with a Death Cross.}

12/08/98 to 07/19/99 length 8 – months.      

The weekly SPX chart from February 2011 to March 2021 shows the Golden Cross signals using a 40 – week MA to approximate the 200 – day MA  and the 10 – week MA to approximate the 50 – day MA.

The next weekly SPX chart illustrates the Golden Cross signals from 1998 to 2012.

Seasonal Stock patterns are bullish until late April/early May, about another three months.  If there’s a Golden Cross signal in the next few trading days, data from prior crosses alerts us that U.S stocks could continue to rise beyond May 2023.

Published by Mark Rivest

Independent investment advisor, trader, and writer. Articles have appeared on Technical Analysis of Stocks and Commodities , Traders.com Advantage, Futuresmag.com, and Finance Magnates.

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