Hello all! First time posting! I wanted to take a moment and share some charts I have ben working on that show the bottom is not in yet. I have read in the past that some people do not put significance into the death cross but I tend to disagree. I will begin with saying that the 50/200 is a LONG TERM strategy, not an immediate reversal sign. Let’s dive in using historical data:
**2013 Bull Run:**
Death cross occurred, Price flipped 50 to support and rejected at the 200. From start to finish, price dropped 65%. To be accurate, we set price from the close of the day that confirms the death cross and price it to the bottom of the retrace. Price then runs as accumulation begins and the floor settles in and we get the 2017 run…
**2017 Bull Run:**
Same situation happens. We get a death cross, Price flips the 50 to act as support, then rejects on the 200. 200 stays as resistance until the next run up. All and all another 55% drop from the death cross.
**2019 (thwarted by COVID!)**
This is a very interesting point. We have a death cross, but we set a very low price point due to COVID. What is interesting about this time frame is that the market PUMPED into the death cross. It did the same flip on the 50, but also broke the 200 for a moment, before correcting. The real question here is, how much did COVID have to do with this drop? You see clearly in the chart that a month before COVID, the 200 and 50 had been taken back AND that the inverse of the death cross happened. I mention this because the 50 was able to fight back over the 200 before COVID broke everything.
**Now we come to present day:**
We see that we have a clear death cross that occurred. What would I be expecting? The same exact thing to play itself out. The 50 needs to be taken back as support, the 200 should reject, and price should eventually reach the average drop of around 55-59% from the death cross.
I know this might not be a popular opinion here, and forgive me for sharing a negative outlook! But looking back at the historical data it would appear to me that the pain is not really over yet and we might need to see some historical break trend to regain our run to the moon. For clarity, I am not a financial adviser, do not plan to ever be one, therefore, I do not offer financial advice. I merely ask that we look at things with a clear mind so we can work on profiting as a community!