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Tuesday, March 20, 2007 9:20:14 PM
“golden cross” or “Golden Cross”
It’s true that the 50 DMA is now above the 200 DMA and the long awaited cross has begun formation.
The cross began formation while the 50 DMA was ascending and the 200 DMA was descending so I pondered the questions “Did the 50 cross the 200 from below or did the 200 cross the 50 from above?” and “Does it really matter?”
Well, it does matter (at least to me). PBLS has been in a three month plus uptrend since the beginning of December 2006 (less than 200 but more than 50 trading days ago) thus the cross was able to form while the longer term indicator (200 DMA) was registering a down trend and the shorter term indicator (50 DMA) was registering an up trend. I term this condition “golden” instead of “Golden” because the longer term indicator still registers a down trend.
When will the “golden cross” become a “Golden Cross”? Well, let’s assume the current upward trend (dashed line in the chart below) continues; then, the rising PPS will have influenced the 200 DMA to have leveled out in about 40 trading days (today is 0 on the X axis) and the longer term indicator will begin ascending shortly thereafter.
It’s true that the 50 DMA is now above the 200 DMA and the long awaited cross has begun formation.
The cross began formation while the 50 DMA was ascending and the 200 DMA was descending so I pondered the questions “Did the 50 cross the 200 from below or did the 200 cross the 50 from above?” and “Does it really matter?”
Well, it does matter (at least to me). PBLS has been in a three month plus uptrend since the beginning of December 2006 (less than 200 but more than 50 trading days ago) thus the cross was able to form while the longer term indicator (200 DMA) was registering a down trend and the shorter term indicator (50 DMA) was registering an up trend. I term this condition “golden” instead of “Golden” because the longer term indicator still registers a down trend.
When will the “golden cross” become a “Golden Cross”? Well, let’s assume the current upward trend (dashed line in the chart below) continues; then, the rising PPS will have influenced the 200 DMA to have leveled out in about 40 trading days (today is 0 on the X axis) and the longer term indicator will begin ascending shortly thereafter.
This post contains no advice...
...JMHO.
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