The use of moving averages became so common that they are mentioned in the McGraw-Hill Investor’s Desk Reference. Some analysts use a 10-week and a 30-week average for the same purpose.” Any crossing by the shorter average below the longer is considered negative. The trend is considered bullihs (upwards) as long as the shorter average is above the longer. Two commonly employed numbers among stock investors are the 50-day (10-week) and the 200-day (40-week) combination. How the two averages related to each other tells a lot about the stength or weakness of a trend. “Two moving averages are commonly used to analyze market trends. John Murphy, the famous CNBC analyst from the 1990s, wrote in The Visual Investor, Stage analysis used the price relative to the moving average to identify four stages of a price cycle.” Over the years, I’ve found that a 30-week moving average (MA) is the best one for long-term investors, while the 10-week MA is best for traders to use. “All that a moving average really does is smooth out the major trend so the wild day-to-day gyrations –which the new buying and selling programs have made even wilder–do not throw off your market perspective. During the 1970s, Stan Weinstein’s Secrets for Profiting in Bull and Bear Markets was a big seller. Since then, technicians have popularized the use of various moving averages. For this purpose, the author prefers to use a 200-day moving aveage, although equally satisfactory results can also be obtained with the use of a 20-30 week moving average applied to weekly charts, or a 4-6 month moving average applied to monthly charts.” “One of the most useful technical phenomena in the determination of major reversals is the major trend moving average.

A death cross is considered a bearish sign it occurs when the 50-day moving average drops below 200-day moving average.Īn early mention of moving average crossovers is found in the 1935 book, Profits in the Stock Market, by H. A golden cross is considered a bullish sign it occurs when the 50-day moving average rises above 200-day moving average. The “cross” refers to two simple moving averages “crossing” over each other. January 31, 2012: Jim Cramer Off the Charts: ‘Golden Cross’.January 31, 2012: Stocks Form ‘Golden Cross’ With Today’s Market Close.January 13, 2012: Golden Cross Forming?.August 31, 2011: ‘Dead Cross’ Triggered-Look Out Below Large Caps.July 1, 2010: S&P in Grips Of Death Cross?.Traders and financial commentators frequently refer to the “golden cross” and “death cross” patterns seen on price charts.

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