The Toronto Star has a good article by Bill Carrigan debunking all the recent talk about the death cross by the Dow last week. He makes some excellent points about moving average crossovers in particular and more generally, about putting too much weight on one indicator. Personally, I’ve never liked using moving average crossovers because they lag so far behind the price action. (link via The Kirk Report)
Is the “death cross” unreliable, as the author suggests, since it failed more often than it succeeded in predicting a fall in prices? Or is it a reliable indicator in that it succeeded more often than not in predicting a rise in market prices? Hmmmmm…..
Great point. I guess it may be a good contrary indicator.