The Death Cross A Poor Indicator

by Dominic de la Gaurdia | 10/20/2015 12:53 PM
The Death Cross A Poor Indicator

This morning we are going to take a quick look at the 200 and 50 day moving averages on the S&P 500, Dow Jones Industrial Average and Russell 2000.

The S&P 500 close yesterday at 2033.66 and is now above its 50 day moving average and its 200 day moving average which is at 2029.94. Funny how no one is talking about this data point.

Back in August everyone was talking about the cross of the 50 day moving average below the 200 day moving average, often referred to as the “death cross”.

The “death cross” on these indexes happened at 1913.85 on the S&P 500. So if you sold on this cross, you are still waiting for the 50 day moving average to cross back above the 200 day moving average for the “all clear” signal.

Upon review the S&P 500 it is much higher now. Next time you hear someone you proclaiming to get defensive due to a “death cross” I suggest you start looking for bargins because the time to get defensive was much earlier.

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