There seems to be a lot of fuss about this, all of a sudden. But, as you'll see if you read the article, the Death Cross is sometimes right, but also wrong so frequently that it's almost useless as a predictor.
I expect the Dow to fall further, but I also think it will likely NOT fall as low as many of the bears are predicting. There are too many other indicators suggesting that it will rebound fairly soon. HOWEVER, that's only in nominal terms. In REAL terms.. in terms of the buying power of the money in the markets... the Dow will continue to be in a secular BEAR for many years to come. (It's been in one for a decade already.)
Worry About Important Things — Not The Death Cross
By Barry Ritholtz - August 16th, 2011, 11:30AM
In July 2010, Bianco Reserch highlighted an analysis by Ron Griess at TheChartStore.com of every instance of the death cross (aka dark cross) since 1930. Below are his results.
The first table shows the performance of the S&P Composite for the time periods listed when the 50-day moving average is falling and crosses a rising 200-day moving average. (Dark Cross)
The second table shows the performance of the S&P Composite for the time periods listed when the 50-day moving average is falling and crosses a falling 200-day moving average. (Death Cross)
The bottom line: There are lots of things to worry about, but this is not one of them — its a low probability indicator:
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Dark Cross
50-day ma falling across a rising 200-day moving average.
Full article: http://www.ritholtz.com/blog/2011/08/worry-about-important-things-not-the-death-cross/
Gold is $1,581/oz today. When it hits $2,000, it will be up 26.5%. Let's see how long that takes. - De 3/11/2013 - ANSWER: 7 Years, 5 Months
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