The TAZ Trader Blog
Is the Death Cross Bearish? Maybe Not…
If you’ve read any kind of stock market news lately, then no doubt you have heard traders talking about something called a “Death Cross” (or some call it a “Black Cross”).
What is it?
It’s when the 50 period moving average crosses below the 200 period moving average in the S&P 500. It just happened recently. This moving average crossover supposedly spells doom for the stock market. Here is a chart:
Should we be concerned?
Some traders think that this is bearish but there are others that think it is a non-event. And then there are some that think it is bullish! Check out these articles at the Wall Street Journal:
The Death Cross: A Buy Signal?
and…
For swing traders, this death cross isn’t a problem. We only trade stocks for a short amount of time.
And, we can trade the long or the short side.
No worries here…
| Print article | This entry was posted by Craig on July 7, 2010 at 5:20 pm, and is filed under Technical Analysis. Follow any responses to this post through RSS 2.0. Both comments and pings are currently closed. |
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about 1 year ago - 17 comments
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Comments are closed.
about 1 year ago
I’ve always found it interesting that when every show on tv and person you know is talking about “X” that it will simply not go that way. I.E. “Hey look at the perfectly forming H&S pattern on the S & P. The market will surely drop….” I think the pro’s look at these highly published events as an chance to fade the public sentiment.
about 1 year ago
Ya, with the fast internet and almost every single trader reading each other’s blogs and the news…
what would happen if everybody was looking at the same pattern and was looking at one direction?
about 1 year ago
The death cross, to me, is the same as 10MA below 30MA in the weekly chart. I then short the market more than long.
about 1 year ago
A japanese trader just look at this chart and says: I have to go short.
http://stockcharts.com/c-sc/sc?s=$spx&p=D&yr=0&mn=4&dy=0&i=p98925602436&a=191130172&r=4697
Learn more at ichimoku wiki, it’s very interesting:
http://www.kumotrader.com/ichimoku_wiki/index.php
about 1 year ago
Here is some more information on the “Death Cross”: http://marketsci.wordpress.com/2010/07/08/the-death-cross/