What was not expected .... Dreaded Death Cross?

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Derek  30 Nov 2018

Good Morning,

It was expected that after such a strong day one would see profit taking in the US. What was not expected was to see all 3 indices making log leg doji's to show uncertainty about the way forward.

Analysts are also worried about the looming death cross. This is when the 50 day moving average (blue) crosses the 200 day moving average (red). This is seen as a bear market and called Death Cross! Currently it is only 16 points apart and if the cross happens, you can kiss the Santa rally goodbye this year.

I marked these two averages on the S&P500 chart. Notice the long leg doji.

The Death Cross did happen for some shares quite a while ago. I show where it happened for Estee Lauder. Currently the price is caught between these two averages with the 50 day still below the 200 day average.

Boeing was not bothered with all this uncertainty and cross scare, and is still flying high.

JSE Technical:
A very mixed day on the JSE.
I must show how Bidvest has now climbed back into a positive trend factor. It has also broken it's 200 day moving average. I marked the death cross on the chart.

Back to Capitec again. FrontRunner did predict a new high, and it did happen now. Not very convincing as it is showing divergence. It did break my resistance, but also not very convincing.

Just for the record .... I am not a big believer in the death cross theory. My reason is that the averages are too long term. By the time the cross actually happens it actually only shows how bad the share has performed to date. When the price breaks these two averages is more important and gives you much earlier warnings.

I prefer to have a Santa rally!

You must have a great weekend.
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