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Definition

The point at which the 50-day simple moving average (MA) crosses up through the 200-day simple MA. Many technical analysts believe that this is a clear sign that the market (usually represented by the S&P500 index) is entering a new bull trend. The golden cross can also work in reverse when the 50-day MA cuts down through the 200-day (called a "death cross") indicating that a new bear trend has commenced. The technique does not always work. For example, when the COVID-19 pandemic began impacting markets in March 2020 the 50-day MA of the S&P500 cut down through the 200-day MA on 26th March very close to the bottom of the down trend - and hence definitely not the best place to be selling. On the other hand, the 50-day MA broke down through the 200-day on 10th March 2022 when the S&P500 was at 4259. It has subsequently fallen by 15,75% and will probably fall further.

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