We are very close to a "death cross" on the S&P500
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We are very close to a "death cross" on the S&P500
Where 50 day MA dives below 200 day MA. Last one was Aug 2011 during the last big sell-off, and the Fed intervened big-time with QE, and off to the races we went. The death cross reversed itself in January 2012, a bullish indicator.
Maybe this bull market is too old and tired, and maybe they won't or can't do any more QE. At some point, the death cross is just going to stick, and it'll be a true bear market.
Right now is too late to get into the stock market... just hold at a 25% PP-ish allocation, and be happy with it. If you want to depart from the PP, do so when the death cross reverses itself, and especially if we have a bloody bear market. It would be a good time to rebalance, which would probably happen automatically anyway at that point for the PP.
Maybe this bull market is too old and tired, and maybe they won't or can't do any more QE. At some point, the death cross is just going to stick, and it'll be a true bear market.
Right now is too late to get into the stock market... just hold at a 25% PP-ish allocation, and be happy with it. If you want to depart from the PP, do so when the death cross reverses itself, and especially if we have a bloody bear market. It would be a good time to rebalance, which would probably happen automatically anyway at that point for the PP.
Re: We are very close to a "death cross" on the S&P500
I've enjoyed it, but this whole 2009-present stock market has seemed kind of silly to me. It's come way farther way faster than any of the economy's fundamentals would suggest ought to be happening.
Note, too, that since the early 1970s we've had a recession about every 7 years, which means that we're due for one right now. I'm pretty sure the stock market won't like that very much.
In addition to the cyclical economic headwinds the economy may be facing in the near future, there is the ever-present structural economic fever represented by the Baby Boomers exiting the workforce and reducing their spending.
The fall should be good for all of those doomer TV commentators who go on TV to tell investors they are all screwed.
Note, too, that since the early 1970s we've had a recession about every 7 years, which means that we're due for one right now. I'm pretty sure the stock market won't like that very much.
In addition to the cyclical economic headwinds the economy may be facing in the near future, there is the ever-present structural economic fever represented by the Baby Boomers exiting the workforce and reducing their spending.
The fall should be good for all of those doomer TV commentators who go on TV to tell investors they are all screwed.
Q: “Do you have funny shaped balloons?”
A: “Not unless round is funny.”
A: “Not unless round is funny.”
Re: We are very close to a "death cross" on the S&P500
The talking heads are only doomers in hindsight. Right now they are trying to calm the sheep.
Re: We are very close to a "death cross" on the S&P500
No one on TV EVER wants to calm the sheep.ochotona wrote: The talking heads are only doomers in hindsight. Right now they are trying to calm the sheep.
Calm sheep have better things to do than watch CNBC, and the programmers know that.
The job of all news programmers is to agitate, titillate, and obfuscate.
Q: “Do you have funny shaped balloons?”
A: “Not unless round is funny.”
A: “Not unless round is funny.”
- dualstow
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Re: We are very close to a "death cross" on the S&P500
Swedroe: Beware The Death Cross! Or Not
http://www.etf.com/sections/index-inves ... oss-or-not
http://www.etf.com/sections/index-inves ... oss-or-not
- mathjak107
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Re: We are very close to a "death cross" on the S&P500
The death cross has been one poor indicator . Since the 1970's there have been 12 death crosses across all 4 indexes at the same time
In 9 out of 12 the markets were higher 3 months later. In fact the s&p was higher in all 9 by 5.000% and 1 year later by more than 8% . Only 2008 was really a good call.
In 9 out of 12 the markets were higher 3 months later. In fact the s&p was higher in all 9 by 5.000% and 1 year later by more than 8% . Only 2008 was really a good call.
Last edited by mathjak107 on Sun Nov 08, 2015 4:53 am, edited 1 time in total.
- MachineGhost
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Re: We are very close to a "death cross" on the S&P500
Code: Select all
Symbol Trade Date Ex. date % Profit
~SPY Long 10/9/1973 1/14/1974 -8.80%
~SPY Long 3/4/1974 3/29/1974 -3.72%
~SPY Long 2/24/1975 9/29/1977 45.80%
~SPY Long 1/12/1978 2/3/1978 -4.53%
~SPY Long 5/8/1978 12/29/1978 3.68%
~SPY Long 1/30/1979 5/15/1980 21.43%
~SPY Long 5/29/1980 7/10/1981 17.10%
~SPY Long 9/21/1982 2/1/1984 27.65%
~SPY Long 9/6/1984 11/10/1987 32.76%
~SPY Long 6/20/1988 3/13/1990 26.75%
~SPY Long 5/14/1990 9/17/1990 -11.32%
~SPY Long 2/11/1991 5/3/1994 32.00%
~SPY Long 9/2/1994 10/2/1998 127.91%
~SPY Long 12/7/1998 11/6/2000 21.29%
~SPY Long 4/22/2002 5/20/2002 -3.29%
~SPY Long 5/13/2003 8/26/2004 17.47%
~SPY Long 10/29/2004 7/26/2006 13.47%
~SPY Long 8/31/2006 12/31/2007 13.15%
~SPY Long 6/19/2009 7/8/2010 16.43%
~SPY Long 10/14/2010 8/18/2011 -3.28%
~SPY Long 1/25/2012 9/4/2015 53.16%
Code: Select all
All trades Buy&Hold (~SPY)
Initial capital 10000 10000
Ending capital 494245.57 629890.19
Net Profit 484245.57 619890.19
Net Profit % 4842.46% 6198.90%
Exposure % 74.29% 100.00%
Net Risk Adjusted Return % 6518.41% 6198.90%
Annual Return % 9.52% 10.15%
Risk Adjusted Return % 12.82% 10.15%
Total transaction costs 45289.24 6461.54
Max. trade drawdown -64986.07 -219695.35
Max. trade % drawdown -33.08 -55.25
Max. system drawdown -64985.55 -219695.35
Max. system % drawdown -33.07% -55.25%
Last edited by MachineGhost on Sun Nov 08, 2015 11:48 am, edited 1 time in total.
"All generous minds have a horror of what are commonly called 'Facts'. They are the brute beasts of the intellectual domain." -- Thomas Hobbes
Disclaimer: I am not a broker, dealer, investment advisor, physician, theologian or prophet. I should not be considered as legally permitted to render such advice!
Disclaimer: I am not a broker, dealer, investment advisor, physician, theologian or prophet. I should not be considered as legally permitted to render such advice!
Re: We are very close to a "death cross" on the S&P500
Unfortunately, I am getting whipsawed by the "porpoising" above and below the 200 day moving average. Sigh. When the market can't make up its mind, at tops, bottoms, or plateaus, this happens. Here's for smoother "long-or-out" sailing in 2016 with few trades. I'd rather lose some value in poor trades than be in for another true bear market.
- MachineGhost
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Re: We are very close to a "death cross" on the S&P500
There's only been one recent whipsaw so far. You're annoyed already?ochotona wrote: Unfortunately, I am getting whipsawed by the "porpoising" above and below the 200 day moving average. Sigh. When the market can't make up its mind, at tops, bottoms, or plateaus, this happens. Here's for smoother "long-or-out" sailing in 2016 with few trades. I'd rather lose some value in poor trades than be in for another true bear market.
"All generous minds have a horror of what are commonly called 'Facts'. They are the brute beasts of the intellectual domain." -- Thomas Hobbes
Disclaimer: I am not a broker, dealer, investment advisor, physician, theologian or prophet. I should not be considered as legally permitted to render such advice!
Disclaimer: I am not a broker, dealer, investment advisor, physician, theologian or prophet. I should not be considered as legally permitted to render such advice!
Re: We are very close to a "death cross" on the S&P500
I am annoyed, but pleased to know that I won't be in future bear markets. Win by not losing!
Last edited by ochotona on Sun Nov 08, 2015 8:09 pm, edited 1 time in total.