SPX S&P 500 Daily Chart Golden Cross

The SPX prints a golden cross yesterday with the 50 crossing above the 200. Note, however, that the golden cross failed in late December-early January maintaining the bear market action. The death cross occurred last August and the bulls continue to try and reverse the negativity.

As always mentioned by Keystone, when a golden cross typically occurs, price actually retreats and when a death cross occurs, price actually rallies, in the near-term. This is due to price having to trend that way for many weeks to create the crosses so once it occurs price has to reverse to take a rest. If the golden cross remains, stocks will be higher for the weeks and months ahead. If the death cross remains, stocks will be lower for the weeks and months ahead.

When the death cross occurred, note how price actually bottomed after the waterfall crash and recovered illustrating the concept mentioned. The death cross remained active so price was lower in the weeks ahead into the October lows. When the bulls tried to create the golden cross in late December note how price retreated. The expectation now would be for price to retreat with the golden cross, in the near-term.

The red rising wedge, overbot conditions and universal negative divergence across all indicators create the spankdown off the top at 2111 last Wednesday. The MACD cross is negative. The money flow is agreeable to some rising price action today but overall, the indicators remain weak and hint at lower lows ahead in the daily time frame.

Of course the central bankers control the markets and with the Fed decision tomorrow afternoon and the BOJ Thursday morning, the stock market remains a coin flip. The chart is weak but the central bankers may pump equities higher with dovish talk. The SPX weekly chart remains long and strong with the MACD line and money flow so higher highs are desired in price in the weekly time frame after the negativity in the daily time frame finds a bottom.

The CPC put/call drops to 0.76 another low value indicating rampant trader complacency. No one is worried since the central bankers always save the day. Will the central bankers save the day again this week or will they create carnage as their credibility falters? This information is for educational and entertainment purposes only. Do not invest based on anything you read or view here. Consult your financial advisor before making any investment decision.