To The Moon

Recent Death (and Golden Cross) for S&P500 (1 Day chart)

S&P500 1D chart as per 20Mar2022

Death crosshappens when 50 days moving average cuts the 200 days moving average from above, a typically bearish signal. Whereas, agolden crosshappens when 50 days moving average cuts the 200 days moving average from below, a typically bullish signal.

Here are some dates when death and golden crosses happened on S&P500 recently:

1. Death Cross on 6 Dec 2018
2. Golden Cross on 29 Mar 2019
3. Death Cross on 27 Mar 2020 (market started to fall from 24 Feb 2020 due to the Covid outbreak)
4. Golden Cross on 9 July 2020
5. Death Cross on 15 Mar 2022

While it is vain to time the market, the duration between recent death and golden crosses were 3 to 4 months (based on the recent occurrences).

I have an observation about both the golden and death cross for S&P500 which are usually lagging indicators. The rise or decline could happen before or after the cross of the 50 & 200 moving averages. Take the death cross on 27 Mar 2020 as an example. The market has started falling since 24 Feb 2020 due to the Covid19 pandemic. In fact, the death cross on 27 Mar 2020 is near the bottom of the "market". Thus, if we entered our "sell" position after the recent death cross, we would have suffered great losses as the market made a strong recovery.

For the coming weeks

What I am more concerned about is whether it is an actual trend reversal as there are potential black swan events like the China Covid outbreak, Ukraine conflict and energy crisis. Being conservative, I would rather wait. Though I may miss out on profits, I may also avoid a falling knife.

@TigerStars