Silver Cross Index Tops Broad Market Index | decision point

(Below is an excerpt from DecisionPoint.com’s subscriber-only DecisionPoint announcement for Thursday, January 4.)

Most are familiar with what a “golden cross” is, when the 50-day moving average moves above the 200-day moving average. Today we will talk about the “Silver Cross”. A ‘silver cross’ is when the 20-day moving average crosses the 50-day moving average upward. Stocks with a 20-day MA above their 50-day MA have a bullish bias in the medium term.

We came up with the Silver Cross Index, which measures how many stocks have a silver cross or bullish IT bias. If the Silver Cross index is above the signal line, there is a bullish IT bias.

On Thursday, the S&P 500’s Silver Cross index hit a record high, and we found that it wasn’t the only one. In the chart below, you can see that the Nasdaq and NYSE Silver Cross indices also ranked high.

Below are charts of all the market indices we cover. You can see that all but Dow Industrials and OEX are ranked high. The Dow and NDX remained at the same numbers, but both showed gains.

conclusion: The medium-term bias remains bullish as the Silver Cross index is above its signal line, but a deterioration is being felt and we should be wary of broader weakness within the market.

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