MV Weather Report: Does Golden Cross Mean Stormy Skies Ahead?
Rain or shine, we review the day's biggest stock stories.
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Some technical analysts, including Professor Jeff Cooper, have started comparing this cross to the one that occurred in 2003:
"As shown in a chart of the S&P from my morning report, there's a distinct difference between the cross then and what's occurred with the current cross: In 2003, the 50-day moving average crossed a rising 200-day moving average.
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"Moreover, note that, prior to the cross, the S&P had tagged its 200-day moving average, then proceeded to back-test its 50-day moving average. This is a pertinent concept, as the first tag of the 200-day moving average in a long period almost always defines a period of pullback/consolidation or marks a rollover and a new leg down in a bear market. The last kiss of the overhead moving average by the S&P occurred in May 2008."
As for today's market, it was a mixed, and very slow, session. I'd actually expect this week to be very slow in general, thanks to the holiday. The S&P 500 closed at the high of the day, up by 8 points, to 927. If you missed it, be sure to read Prof. Smita Sadana's piece Why the Golden Cross May Not Be Golden.
The biggest winners were the defense names: General Dynamics (GD), Lockheed Martin (LMT), and United Technology (UTX). The banks were also strong for the session: Bank of America (BAC), Wells Fargo (WFC), and JPMorgan (JPM).F our losers that stuck out to me were the master betas (as Toddo likes to call them): Amazon (AMZN), Research In Motion (RIMM), Baidu (BIDU), and Apple (AAPL).
Tomorrow will be a special Turnaround Tuesday, as it's also the last day of the quarter-- is window-dressing too easy? Traders will be watching for the consumer confidence numbers and the S&P Case-Shiller Home Price Index at 9:00 a.m.; the Chicago PMI will follow at 9:45 a.m.
Have a great night!
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