S&P500 Averages are Converging

Headlines have been pointing out that the Dow Jones Industrial average has hit a “DEATH CROSS”- the descriptive term for when the 50dma crosses below the 200dma.  What concerns me more is that the S&P500 is converging toward the same trend.

Note the below chart, the 50dma hasn’t dipped below the 200dma for exactly four years.  But it’s within 0.89%.  Does that foretell mayhem?  No…but it is concerning.

My favorite S&P500 trading indicator is the 100 day moving average.  [See related article:  Swing Trading in One Chart ]  Storm clouds have been forming on that chart for some time.  Not only is the index below the 100dma, but so is the 5dma, 10dma, and 50dma…surely a warning of thin ice.

As always, invest with caution.

S&P500 moving averages 150813

———————————————————————————————————–

Listen to the Wealthsteading Podcast to receive updated market commentary:

www.wealthsteading.com

The 10 Wealth Building Principles can be heard at:

http://www.wealthsteading.com/category/wealth-building-principle/

Subscribe to the Wealthsteading Podcast:

via iTunes:  https://itunes.apple.com/us/podcast/wealthsteading-podcast/id896417058

Building Wealth, Investing, Retirement, Stock Trading, Freedom, Liberty, Life, History

Article written by