Golden cross
Meanwhile, chart watchers noted that the S&P 500’s 50-day moving average rose above its 200-day moving average on Thursday, a pattern known as a golden cross.
Since 1950, the S&P 500 has produced an average 12-month return of 10.5% after a golden cross formed, while the overall average annual return since 1950 is 9.1%, according to Adam Turnquist, chief technical strategist at LPL Research.
However, when a golden cross has appeared as the 200-day moving average is declining – as it is now – the average 12-month return for the S&P 500 jumps to 16.8%.
“The recent golden cross adds to the growing technical evidence of a trend change for the S&P 500 and further raises the probabilities of the bear market low being set in October,” Turnquist said in a post.
Improving internals
Willie Delwiche, an investment strategist at All Star Charts, said all five…
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