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Strategies & Market Trends : Buy and Sell Signals, and Other Market Perspectives -- Ignore unavailable to you. Want to Upgrade?

To: GROUND ZERO™ who wrote (36316)	8/13/2012 10:46:52 AM
From: Challo Jeregy	3 Recommendations Read Replies (3) \| Respond to of 223393

The S&P 500 Is Close to a Once-in-a-Lifetime Signal . . . . . The next chart I'm going to share discusses another recent signal that tends to be a top precursor. Last week, 10-year bond rates hit a 50-day high, as did the S&P 500 (SPX). The last time these two things happened together was March 13, 2012 -- and before that, October 27, 2011. Note that this signal led the top in March by several weeks. While not quite as long-term as a monthly death cross (what else is?), this is still an intermediate signal, so it doesn't mean the market's necessarily going to collapse tomorrow -- it just increases the odds that an intermediate top is under construction. . . . . . I'm going to continue limiting focus on the short-term until it clarifies again. Instead, let's look at some of the intermediate and long-term evidence and signals. The S&P 500 ( SPX) monthly chart shows a rare event that I've been keeping my eye on for a while: the pending potential cross of the 50 month and 200 month moving averages. It's fair to call this signal "once in a lifetime," since these two moving averages haven't crossed on SPX in over 66 years (they last crossed upwards, in April, 1946). When they cross downwards, this is commonly called a "death cross" and considered a bearish signal -- but before bears get too excited, it calls for some discussion. While this signal hasn't actually happened in SPX for 66 years, SPX did come very close in 1978. This was at the tail end of the long secular bear market of 1966-1982. I say "tail end," but this is of course relative, and it was still 4 more years until the bear market actually ended. This monthly death cross happened a couple years later in the Dow Jones Industrial Average ( INDU), in August of 1980. The INDU then crossed back up (called a "golden cross") in April 1982. However, in both those death cross instances, the bear market wasn't over -- and while we can look back and say it was near the "end" of a secular bear market, two to four years is still a pretty long time by the standards of most investors. more . . . . . minyanville.com