Roundup: Trading the Golden Cross

27Jun09

Just a little housekeeping. This is a roundup of our recent posts talking about the Golden Cross (aka 50/200-day moving average crossovers).

>> Moving Average Crossovers Debunked?

Our original (long ago) post on 50/200-day (and 10/50-day) moving average crossovers.

Conclusion: longer-term MA crossover strategies like these aren’t particularly great for producing outsized returns, but they have done a fairly good job at protecting investors from protracted downturns.

>> Which Golden Cross is the Best Golden Cross?

A look at EMA vs SMA golden crosses (two different flavors of moving averages).

Conclusion: the SMA variation has performed a small bit better historically, but the difference isn’t significant enough to get worked up over.

>> Testing the Rare Downtrending Golden Cross

A look at golden crosses that occur when the 200-day SMA is still falling.

Conclusion: downtrending (falling 200-day SMA) golden crosses have historically been about as bullish as any other.

>> The Golden Cross and Dow Jones Transport Confirmation (Trading DJIA 30)

How the golden cross has performed with and without confirmation by the transportation index.

Conclusion: waiting for confirmation from transports hasn’t hurt or helped performance of the golden cross much, but has significantly reduced exposure (time in market) – an inherently good thing.

>> The Golden Cross and Dow Jones Transport Confirmation (Trading S&P 500)

Same test as the previous report, but trading the S&P 500 rather than the DJIA 30.

Conclusion: same conclusion as well…more or less the same performance, with a lot less exposure to the market.

Happy Trading,
ms

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