We are very close to a "death cross" on the S&P500

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ochotona
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We are very close to a "death cross" on the S&P500

Post by ochotona » Thu Aug 27, 2015 6:53 pm

Where 50 day MA dives below 200 day MA. Last one was Aug 2011 during the last big sell-off, and the Fed intervened big-time with QE, and off to the races we went. The death cross reversed itself in January 2012, a bullish indicator.

Maybe this bull market is too old and tired, and maybe they won't or can't do any more QE. At some point, the death cross is just going to stick, and it'll be a true bear market.

Right now is too late to get into the stock market... just hold at a 25% PP-ish allocation, and be happy with it.  If you want to depart from the PP, do so when the death cross reverses itself, and especially if we have a bloody bear market. It would be a good time to rebalance, which would probably happen automatically anyway at that point for the PP.
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Re: We are very close to a "death cross" on the S&P500

Post by MediumTex » Tue Sep 01, 2015 6:39 pm

I've enjoyed it, but this whole 2009-present stock market has seemed kind of silly to me.  It's come way farther way faster than any of the economy's fundamentals would suggest ought to be happening.

Note, too, that since the early 1970s we've had a recession about every 7 years, which means that we're due for one right now.  I'm pretty sure the stock market won't like that very much.

In addition to the cyclical economic headwinds the economy may be facing in the near future, there is the ever-present structural economic fever represented by the Baby Boomers exiting the workforce and reducing their spending.

The fall should be good for all of those doomer TV commentators who go on TV to tell investors they are all screwed.
Only strength can cooperate. Weakness can only beg.
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ochotona
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Re: We are very close to a "death cross" on the S&P500

Post by ochotona » Tue Sep 01, 2015 7:55 pm

The talking heads are only doomers in hindsight. Right now they are trying to calm the sheep.
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Re: We are very close to a "death cross" on the S&P500

Post by MediumTex » Tue Sep 01, 2015 8:10 pm

ochotona wrote: The talking heads are only doomers in hindsight. Right now they are trying to calm the sheep.
No one on TV EVER wants to calm the sheep.

Calm sheep have better things to do than watch CNBC, and the programmers know that.

The job of all news programmers is to agitate, titillate, and obfuscate.
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Re: We are very close to a "death cross" on the S&P500

Post by dualstow » Fri Sep 04, 2015 2:42 pm

Swedroe: Beware The Death Cross! Or Not
http://www.etf.com/sections/index-inves ... oss-or-not
New drinking game: have a drink every time someone on the radio or TV news says "data"
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Re: We are very close to a "death cross" on the S&P500

Post by mathjak107 » Sun Nov 08, 2015 4:48 am

The death cross has been one poor indicator . Since the 1970's there have been 12 death crosses across all 4 indexes at the same time

In 9 out of 12 the markets were higher 3 months later. In fact the s&p was higher in all 9  by 5.000% and 1 year later by more than 8% .  Only 2008 was really a good call.
Last edited by mathjak107 on Sun Nov 08, 2015 4:53 am, edited 1 time in total.
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Re: We are very close to a "death cross" on the S&P500

Post by MachineGhost » Sun Nov 08, 2015 10:25 am

Code: Select all

Symbol	Trade	Date	Ex. date	% Profit
~SPY	Long	10/9/1973	1/14/1974	-8.80%
~SPY	Long	3/4/1974	3/29/1974	-3.72%
~SPY	Long	2/24/1975	9/29/1977	45.80%
~SPY	Long	1/12/1978	2/3/1978	-4.53%
~SPY	Long	5/8/1978	12/29/1978	3.68%
~SPY	Long	1/30/1979	5/15/1980	21.43%
~SPY	Long	5/29/1980	7/10/1981	17.10%
~SPY	Long	9/21/1982	2/1/1984	27.65%
~SPY	Long	9/6/1984	11/10/1987	32.76%
~SPY	Long	6/20/1988	3/13/1990	26.75%
~SPY	Long	5/14/1990	9/17/1990	-11.32%
~SPY	Long	2/11/1991	5/3/1994	32.00%
~SPY	Long	9/2/1994	10/2/1998	127.91%
~SPY	Long	12/7/1998	11/6/2000	21.29%
~SPY	Long	4/22/2002	5/20/2002	-3.29%
~SPY	Long	5/13/2003	8/26/2004	17.47%
~SPY	Long	10/29/2004	7/26/2006	13.47%
~SPY	Long	8/31/2006	12/31/2007	13.15%
~SPY	Long	6/19/2009	7/8/2010	16.43%
~SPY	Long	10/14/2010	8/18/2011	-3.28%
~SPY	Long	1/25/2012	9/4/2015	53.16%

Code: Select all

 	All trades	Buy&Hold (~SPY)
Initial capital	10000	10000
Ending capital	494245.57	629890.19
Net Profit	484245.57	619890.19
Net Profit %	4842.46%	6198.90%
Exposure %	74.29%	100.00%
Net Risk Adjusted Return %	6518.41%	6198.90%
Annual Return %	9.52%	10.15%
Risk Adjusted Return %	12.82%	10.15%
Total transaction costs	45289.24	6461.54
Max. trade drawdown	-64986.07	-219695.35
Max. trade % drawdown	-33.08	-55.25
Max. system drawdown	-64985.55	-219695.35
Max. system % drawdown	-33.07%	-55.25%
Take off another 1.50%-2% for taxes going by Morningstar adjustments.
Last edited by MachineGhost on Sun Nov 08, 2015 11:48 am, edited 1 time in total.
"All generous minds have a horror of what are commonly called 'Facts'. They are the brute beasts of the intellectual domain." -- Thomas Hobbes

Disclaimer: I am not a broker, dealer, investment advisor, physician, theologian or prophet.  I should not be considered as legally permitted to render such advice!
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ochotona
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Re: We are very close to a "death cross" on the S&P500

Post by ochotona » Sun Nov 08, 2015 5:05 pm

Unfortunately, I am getting whipsawed by the "porpoising" above and below the 200 day moving average. Sigh. When the market can't make up its mind, at tops, bottoms, or plateaus, this happens. Here's for smoother "long-or-out" sailing in 2016 with few trades. I'd rather lose some value in poor trades than be in for another true bear market.
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Re: We are very close to a "death cross" on the S&P500

Post by MachineGhost » Sun Nov 08, 2015 7:05 pm

ochotona wrote: Unfortunately, I am getting whipsawed by the "porpoising" above and below the 200 day moving average. Sigh. When the market can't make up its mind, at tops, bottoms, or plateaus, this happens. Here's for smoother "long-or-out" sailing in 2016 with few trades. I'd rather lose some value in poor trades than be in for another true bear market.
There's only been one recent whipsaw so far.  You're annoyed already?
"All generous minds have a horror of what are commonly called 'Facts'. They are the brute beasts of the intellectual domain." -- Thomas Hobbes

Disclaimer: I am not a broker, dealer, investment advisor, physician, theologian or prophet.  I should not be considered as legally permitted to render such advice!
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ochotona
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Re: We are very close to a "death cross" on the S&P500

Post by ochotona » Sun Nov 08, 2015 8:07 pm

I am annoyed, but pleased to know that I won't be in future bear markets. Win by not losing!
Last edited by ochotona on Sun Nov 08, 2015 8:09 pm, edited 1 time in total.
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