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Worry About Important Things — Not The Death Cross

Posted By Barry Ritholtz On August 16, 2011 @ 11:30 am In Markets,Really, really bad calls,Technical Analysis,Trading | Comments Disabled

In July 2010, Bianco Reserch highlighted an analysis by Ron Griess at TheChartStore.com [1] of every instance of the death cross (aka dark cross) since 1930.  Below are his results.

The first table shows the performance of the S&P Composite for the time periods listed when the 50-day moving average is falling and crosses a rising 200-day moving average. (Dark Cross)

The second table shows the performance of the S&P Composite for the time periods listed when the 50-day moving average is falling and crosses a falling 200-day moving average. (Death Cross)

The bottom line: There are lots of things to worry about, but this is not one of them — its a low probability indicator:

>

Dark Cross

50-day ma falling across a rising 200-day moving average.
[2]

~~~

Death Cross

50-day ma falling across a falling 200-day ma
[3]


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URL to article: http://www.ritholtz.com/blog/2011/08/worry-about-important-things-not-the-death-cross/

URLs in this post:

[1] TheChartStore.com: http://www.thechartstore.com

[2] Image: http://www.ritholtz.com/blog/wp-content/uploads/2011/08/Dark-table1.png

[3] Image: http://www.ritholtz.com/blog/wp-content/uploads/2011/08/Death-table1.png

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