The S&P 500 Hasn't Done This Since April

The golden cross is a technical chart pattern indicating the potential for a major rally. The golden cross appears on a chart when a stock's short-term moving average crosses above its long-term moving average. The most famous golden cross, used and monitored by the Smart Money is when the 50 moving average cross over and above the 200 day moving average.

On Thursday, the S&P 500 traded lower, but find support right along its 50-day moving average around the 3,340 level. Traders often look to the 50- and 200-day moving averages as important support levels when a security is trading above the averages, and important resistance levels when a security is trading below the averages.

However, on Friday it was a different story as price closed below the 50-day moving average marking the first time this has happened since April.

There isn’t a name for when price crosses below the 50 day moving average, while the 50 day moving average crosses over and above the 200 day moving average, but it does imply short term bearishness.

John Kolovos, chief technical strategist at Macro Risk Advisors, these types of moves point to signs that the correction isn't over yet. However, for the bulls there is some good news, at least short term as price did touch the weekly demand at 3160 and pulled back a bit. Is this the end of the correction, this is anyone's guess. I personally anticipate price penetrating the weekly demand by about 50% before potentially bouncing higher.

This post is my personal opinion. I’m not a financial advisor, this isn't financial advise. Do your own research before making investment decisions.

Posted Using LeoFinance