I think its all suspect; no sooner is the "death" announced that, ta-dah! a reversal is a possibility and on the cards ... hmm ... well which is it then, sell or buy? These types of "signals" have far too little historical data to prove anything one way or the other and even if such a signal did exist it would quickly be arbitraged out if existence.

Trying to time the market like this essentially implies that one is able to out-know, out-guess, out-etc all the other investors, mainly institutional, that have access to every conceivable trading system, database, software system, portfolio management and asset allocation tools available. I think that’s probably an unlikely eventuality in the long-term although we may get lucky and guess right sometimes.


>>What statistical data have you got on "death crosses" and subsequent price action? Over what time frames have you tested the subsequent price action in these crossover occurrences to define an up or down movement? How many times did the price action confirm the "death cross signal"? I doubt that this "signal" has any significant statistical grounding as a predictor of price movements.
>
>Your doubts are correct. In and of itself we cannot glean much from a single signal, which is why I flushed out my thinking a bit. For that matter "technically" speaking only the 50 crossing the 200 is a "death cross", the 50 crossing the 100 is just bad news.
>
>Take the cross, combined with the sma test and the existing downward trend and I think there is potential to capitalize on the short term action either way.
>
>-Fail the 100sma test and fall back below the 200sma (which currently coincides with the previous high) and we should look to short.
>or
>-Confirm above the 100sma and it's time to go long the NASDAQ, S&P and others which have yet to follow. The DOW appears to be leading the action right now.
>
>...and of course "past results are no indicator of future actions". ;)
>
>>>Here's a quick follow up to a previous post. You can use these links to follow along.
>>>
>>>DOW
>>>http://finance.yahoo.com/echarts?s=%5EDJI+Interactive#chart3:symbol=^dji;range=6m;indicator=sma(50,100,200)+volume;charttype=line;crosshair=on;ohlcvalues=0;logscale=on;source=undefined
>>>
>>>NASDAQ
>>>http://finance.yahoo.com/echarts?s=%5EIXIC#chart2:symbol=^ixic;range=6m;indicator=sma(50,100,200)+volume;charttype=line;crosshair=on;ohlcvalues=0;logscale=on;source=undefined
>>>
>>>S&P
>>>http://finance.yahoo.com/echarts?s=%5EGSPC+Interactive#chart2:symbol=^gspc;range=6m;indicator=sma(50,100,200)+volume;charttype=line;crosshair=on;ohlcvalues=0;logscale=on;source=undefined
>>>
>>>RUSSELL
>>>http://finance.yahoo.com/echarts?s=%5ERUT+Interactive#chart1:symbol=^rut;range=6m;indicator=sma(50,100,200)+volume;charttype=line;crosshair=on;ohlcvalues=0;logscale=on;source=undefined
>>>
>>>
>>>All 3 major US indicies had double death crosses where the 50 day moving average had crossed below both the 100 and 200 day averages and the Russell 2000 had 1 where the 50 went below the 100 (it's about to cross below the 200). However, since then we've rallied during earnings season and all 4 indicies have crossed above their 50 & 200 day averages. This is bullish action suggesting that buyers are up-paying for securities.
>>>
>>>All 4 indicies are approaching their 100 day moving averages and their 61.8 fib retracements off the recent lows.
>>>
>>>Today's close in parens
>>>
>>>DOW (10537) 100sma=10526 61.8fib=10588
>>>NASDAQ (2288) 100sma= 2324 61.8fib= 2353
>>>S&P (1113) 100sma= 1128 61.8fib= 1140
>>>RUSSELL (662) 100sma= 669 61.8fib= 685
>>>
>>>Note : The DOW is above it's 100sma and is above it's mid June high which, if confirmed, will break the lower-high trend we've been seeing since April.
>>>
>>>If the rally continues and we confirm break outs above the 100 day SMAs and above the 61.8 fib retracements we could be heading for a retest of the late April highs.
>>>
>>>If the rally fails to breakout, we're likely to retest the early July lows.