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Golden cross and death cross

A golden cross is the 50-day moving average crossing above the 200-day; a death cross is the reverse.

A fast and a slow moving average crossingA jagged price line with two smoother average lines through it; the fast average dips below the slow one on the left and cuts back above it in the middle, where a circle marks the crossing.pricefast averageslow averagefast crosses belowfast crosses abovethe slow averageAverages of recent closes; the fast one reacts sooner than the slow one.
Fast and slow moving averages crossing. A moving average is the average of the last few closing prices, redrawn each period. An average over fewer periods turns sooner than one over many, so the two lines cross whenever the recent pace of the market changes.

These crossovers are widely reported because they are simple and slow. A golden cross says the intermediate trend has turned up relative to the long-term trend; a death cross says the opposite.

They lag badly. By the time a death cross prints, the market has often already fallen a long way, and it sometimes marks the low rather than the start of a decline.

Example: the S&P 500 printed a death cross in March 2022 near 4,300 and continued to 3,500 by October; it printed one in March 2020 near 2,700 within days of the low.

Related: moving-average, trend, index

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