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S&P 500 up ca. 59% since the last GOLDEN CROSS (x-over SMA50/SMA200), Status as per ME July 2015
But what comes up to mind is then the question about what defines a so called "Golden Cross"? Let's recap history for that matter:
In January 2012 (more than 3 years ago ;-) Birinyi Associates has sent out bullish notes, one of them about the Golden Cross:-) [...] they note that the S&P 500′s 50-day moving average is about to cross above its 200-day moving average, a blessed event known as the Golden Cross, which is the polar opposite of the (occasionally) nightmarish event known as the Death Cross.
There have been 26 Golden Crosses since 1962 [my remark: up to Jan. 2012], Birinyi noted in 2012, and stocks have been higher 81% of the time in the six months after those events, for an average gain of 6.6%. source: http://blogs.wsj.com
On this occasion please check out the computation of returns involving the Crossover of the SMA50/SMA200 over the last decades in the S&P 500: http://www.indexresult.com
extract from these computations: From the 1st Feb. 2012 up to 30th July 2015 the Signal from the Golden Cross is LONG - resulting in a gain of > 59% in the last 878 Days in the market - alone in the index (not speaking about the performance of possible stock-investments during that time-frame) - fyi: the BUY/LONG-signal is still in place, but - especially after such a long time - be aware of a possible Death Cross ( = being the opposite of the Golden one).
Check out also a great article on the Birinyi statement in 2011: http://www.ritholtz.com ("saying that the outcome based on the research done by Birinyi is much more bullish, that if they had used the whole data available, before 1960")
To also get a touch for the Crossover-power of the long-term average (200) and the intermedia average (50), take a look at the, daily updated, chinese chart of the Shanghai Composite Index:
Two interesting facts on the Shanghai Composite Index (as per 31st July 2015):
1) Recheck the Golden Cross in August 2014 indicating a buying signal @ ca. 2,200 points in the Index!
2) Recheck the supporting power of the SMA200 (blue line) after the intermedium "Crash"/Correction @ ca. 3,400 points in July 2015 (there are rumours in the market, that the Chinese officials are buying the dips around that long-term support - could be coincidence...Anyway: IF the weekly close falls below this 200-day-average the Chance/Risk-Profile may be against the investors).
greetings & happy weekend
Ralph Gollner
