‘Golden Cross’ Triggers DJIA

‘Golden Cross’ Triggers DJIA


FLASH: The DJIA triggered a technical signal Tuesday that many participants believe could mean more gains for stocks, the pattern is known as the ‘golden cross.

The chart pattern comes about when a short-term moving average moves above a longer-term moving average. Moving averages are popular trend indicators used by technical analysts.

In the case of the DJIA Tuesday, the 50-Day MA crossed above the index’s 200-Day MA, which is the most widely watched combination among technicians.

Some analysts employ additional criteria in determining whether a cross is triggered, for example, if both moving averages are trending North, which the DJIA’s currently are.

Even with the Dow’s slightly lower close Tuesday on trade concerns, the 50-Day MA managed to end the session above the 200-Day MA.

Other major indexes, such as the S&P 500 and NAS Comp, have moved closer to a golden cross as stocks continue to rally off their 26 December lows, buoyed by a Fed pause in interest rate hikes and building investor optimism for a trade deal between the US and China.

The golden cross should not be looked at in a vacuum; gains in the S&P 500 and NAS Comp that have lifted those indexes above their highs from early March as further evidence the market is strengthening.

HeffX-LTN’s overall technical analysis of the major US stock market indexes is Bullish in here.

Stay tuned…

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Paul Ebeling

Paul A. Ebeling, polymath, excels in diverse fields of knowledge. Pattern Recognition Analyst in Equities, Commodities and Foreign Exchange and author of “The Red Roadmaster’s Technical Report” on the US Major Market Indices™, a highly regarded, weekly financial market letter, he is also a philosopher, issuing insights on a wide range of subjects to a following of over 250,000 cohorts. An international audience of opinion makers, business leaders, and global organizations recognizes Ebeling as an expert.

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