The threatening “Cross of Cross” | Tahaedailytribune.com

Technical analysts use mathematics and diagram patterns to determine the entry and exit points for stocks and the overall market. But mathematics and diagrams ensure a convincing reading, so that technicians don't get much press. Nevertheless, there is an indicator that is in the headlines every time there is a sales signal. The “Death Cross” sales signal occurs when the sliding 50-day average is below the sliding 200-day average. Unfortunately, this indicator is mainly given because of its name, not on its usefulness.

Last week, a CNBC Pro published an article entitled “The S & P 500 formed a threatening 'Cross of Cross”. What the story says happens next. “That sounds scary and the author wrote:” It is a worrying signal that indicates that the S&P 500 can loses dynamics at short notice. “But everyone who follows the market knows that the S&P 500 has lost dynamics. This is an understatement!

Interestingly, the article contains useful statistics about what happened after every S&P 500 Death Cross from 1928. Twenty days after death, the S&P 500 had decreased by only 0.5 percent. 40, 60 and 80 days after the death cross rose an average of 0.9 percent, 2.3 percent and 2.6 percent. That is hardly scary.

I am not surprised by these results. In my article in August 2020 with the title “Susless Headlines” I mocked the death cross by finding that it sold the Dow Jones Industrial Average on the day of March -Covid. The market gathered almost 50 percent before the indicator finally returned to a purchase signal.

The death cross is calculated from data in the past. So if authors write about the death cross, you should use the past form. Few do it.

The same applies to most analysts in financial networks. The financial news shows helpful information, but most of the comments and opinions of strategists and analysts only reflect the future and extend what has already happened. Have you noticed how most analysts are bearish on big down days and see most analysts on big days?

Instead of seasoning the movement every day, you are better served by simply asking yourself whether it is more likely that the economy and company gains will get better or worsen. The answer should not change every day.

David Vomund is an independent investment consultant in the sloping village. Information can be found at or by phone at 775-832-8555. Customers keep the positions mentioned in this article. The performance in the past does not guarantee future results. Contact your financial advisor before buying security.