Beware the Dark Cross

Barry Ritholtz has some cool info on a major technical indicator which may be on the horizon for the SP 500 (NYSE: SPY): the Dark Cross.

Mary Ann Bartels at Bank of America (NYSE: BAC) explains:

The bearish counterpart of the Golden Cross is called a Dark Cross. This signal occurs when the 50-day moving average crosses below the 200-day moving average. For the S&P 500, Dark Crosses are not all that bearish. The 42 Dark Cross signals that have occurred since 1928 have generated an average 12-month return of 2.4% for the S&P 500 vs. the average S&P 12-month return of 7.2%.[…]

The current trading range on the S&P 500, which began in 2000, has seen two of these more bearish signals – one in 2000 and the other in 2007.

Barry exhibits the Cross system on the NYSE, and below we do the same for the SP 500:

Disclosure: No positions.

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