Tuesday, March 23, 2010

Chinese Stock Market....Major Trend Direction Coming?

If you just watch one indicator in a stock or exchange's chart it would have to be the "Golden Cross" or the "Death Cross". Because large institutional money can't move positions quickly, they view this as a "larger picture" signal and allows them to react.

When the 50 day moving average crosses through the 200 day moving average (Golden= up through, Death= down through), a significant trend change is taking place.

From ClusterStock Chinese Stock Market..Death Cross Forming

Technical analysts are awfully creative in naming their indicators and this one lives up to the hype. The rare seen “death cross” is currently unfolding in Shanghai. As you can see in the following two charts a “death cross” occurs when a short-term moving average crosses over a long-term moving average from top to bottom. It’s generally a sign of a weakening market move. Figure 2 shows the inverse of the “death cross” – the “golden cross”, which usually foreshadows a continuing or new bull market move.

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