Date: Fri, 10 July 2020
Author(s): Amena Saad and Sarah Ponczek
The S&P 500 is sending a technical signal that has marked the end of every bear market in modern history.
The benchmark’s 50-day moving average broke above the 200-day line on Thursday for the first time since the depths of the selloff in late March, forming a so-called golden cross. The price pattern is seen by some technical analysts as a positive omen as it frequently precedes sustained rallies.
Golden crosses for the S&P 500 have corresponded with the end of every major bear market in the last 70 years, according to Sundial Capital Research.
To be sure, using signals that worked in the past in today’s unique market environment isn’t a foolproof strategy. Investors learned that in March, when predictions for further stock-market losses were steamrolled as the S&P 500 embarked on a historic rebound. Still, there’s value in viewing a suite of technical and fundamental indicators together, and this one mostly sits on the positive side of the ledger.
Jason Goepfert, the president of Sundial, has analyzed these types of technical signals for decades and found they’re “barely useful” as a standalone metric. Take 2019 for example, when a golden cross registered to completely reverse a year later with the Covid-19 crash.
“Whether it was successful or not depends on one’s time frame,” Goepfert wrote in a report to clients.
What’s notable this time, though, is that the price pattern signals a reversal of what was a very negative spread between the two averages, with the 50-day average dipping more than 9% below the 200-day average.
“We wouldn’t put a lot of faith in the golden cross by itself,” Goepfert wrote. “The biggest reason for optimism is that it has reversed what had been a very negative medium- vs long-term trend, and that has led to big gains over the next 6-12 months every time over the past 70 years.”
Keyword : sterlinghousetrust.com, Sterling House Trust, SHT
Sterling House Trust is a private trust with a difference. It offers its members an exclusive and reliable platform to access unique opportunities and lifestyle services reserved for the select few. With its team of professional managers Sterling House Trust constantly scans the markets and collaborate with reliable global partners to create a portfolio of carefully curated programmes for its members. Members can access these programmes according to their individual needs, interest and financial capacity. Sterling House Trust is headquartered in Auckland, New Zealand, and has operations based in London, UK.
The Sterling House Trust platform was established with the objective of providing its members, secure access to opportunities across a range of global locations, sectors and services.
Our unique Platform was established within the framework of a trust so that the trust would have oversight and governance over the range of services and its quality. Member protection is a core principle and drive in all that we do. Our trustees ensures that the interests and quality of service provided by the Platform are always maintained at the highest standards.
The trust and its trustees provide robust oversight and is constantly on the move to identify and shortlist select opportunities in the international markets. Likewise, we apply the same stringent standards in identifying and selecting providers and professional partners to join our Platform.
The Sterling House Trust Platform utilises our international footfall and relationships to provide our members with access to a range of international opportunities via our global network which covers a broad range of sectors including:
Asset protection, international property ownership and management, alternative and direct ownership, estate planning, banking services, foreign exchange, card services, alternative investment and lifestyle services.
New Zealand Head Office
31/335 Lincoln Road,
14-16 Dowgate Hill,
England EC4R 2SU