The Significance Of The Golden Cross…Statistically

The golden cross is a technical chart pattern indicating the potential for a major rally. The golden cross appears on a chart when a stock’s short-term moving average crosses above its long-term moving average.  The most famous golden cross, used and monitored by the Smart Money is when the 50 moving average cross over and above the 200 day moving average.

There isn’t a name for when price crosses over and above the 50 day moving average, while the 50 day moving average crosses over and above the 200 day moving average, but it’s statistical significant on the S&P 500.

Since 2009, the S&P has crossed above its 50-day moving average, a key technical level, on 10 other occasions (with a minimum of one month between episodes).

Two weeks after the S&P 500 crossed back over its 50-day moving average, the S&P, Dow Jones Industrial Average and Nasdaq Composite all tend to trade consistently higher — each a positive trade 90% of the time, according to a CNBC analysis of Kensho, a machine-learning tool used by Wall Street banks and hedge funds to identify trading opportunities from historical market patterns.

Among the top-performing sectors two weeks later: Industrials, materials and tech, all trading positively 90% of the time.


Last week, the SPDR Materials ETF, XLB had its best one week return in over 10 years.

However, price finds itself at a critical level again, at the weekly supply at $58.50.  The zone isn’t fresh, meaning price has been here before, so price could go higher….or because price has memory, the sellers could step in and push price back down…only time will tell.

This post is my personal opinion. I’m not a financial advisor, this isn’t financial advise. Do your own research before making investment decisions.

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