This S&P 500 Death Cross Could Be The Real Deal
- Thread starter BondTrader001
- Start date
The death cross is one of the few analysis items that the mainstream financial media cites which is actually an objective and empirically calculated series. Usually, they cite subjective and anecdotally based analysis ( based on "sentiment", chart patterns, support resistance levels, Fibonacci levels, loose / imprecise valuation metrics, sentient opinion, etc ) .
As the death cross has produced low probability outcomes over time, the "pure" price cross of the S&P 500 vs. monthly basis moving averages has produced alpha vs. buy and hold *.
* http://www.advisorperspectives.com/...ook-back-at-the-performance-of-the-holy-grail
James
Director Quantitative Research
XOXOX
Boulder, CO
As the death cross has produced low probability outcomes over time, the "pure" price cross of the S&P 500 vs. monthly basis moving averages has produced alpha vs. buy and hold *.
* http://www.advisorperspectives.com/...ook-back-at-the-performance-of-the-holy-grail
James
Director Quantitative Research
XOXOX
Boulder, CO
I found that High vs Low P(event) is BS.
Meaning that Low P(event) has huge payoff.
And inversely, High P(event) has a tiny payoff.
In other words... It approximately balance each other.
However I do not want to generalize my findings,
But it could be smart to play low P(Event),
For it's payoff, but to max out its P(G).
Actually, I am certain it's the rule.
However, there are exceptions.
Discount the obvious,
Bet on the unexpected.
But minimize P(H)*Harm.
We are talking about weekly moving average ( 50/100 ) , not daily .
And this DEATH CROSS is for real ..........
The sample is too small.
You can't draw any informed decision.
It's a gamble more than a speculative trade.
No problem, this is my point .
Every time the two crossed the high % play is to trade against it for 2 days and make a lot of money...look at the market movement after each cross..
By the way, IMHO.
This time the cross happens below the price.
Which is a different setup than all the previous ones.
That bull market has been far more volatile than the previous ones.
It has always been a paranoid one. Due to the fed raising rates or not.
So watch the fed. I think it's about all that matters. Not the death cross.
Or the market could have shift his focus. What does make it volatile ?
The death cross is a laggin signal. And this time is an exception.
This time the cross happens below the price.
Which is a different setup than all the previous ones.
That bull market has been far more volatile than the previous ones.
It has always been a paranoid one. Due to the fed raising rates or not.
So watch the fed. I think it's about all that matters. Not the death cross.
Or the market could have shift his focus. What does make it volatile ?
The death cross is a laggin signal. And this time is an exception.
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