The three major US equity indices (Dow, S&P 500, Nasdaq) all recently experienced golden crosses, and now it's oil's turn. A golden cross is a formation that many technicians consider to be bullish that occurs when the 50-day moving averages crosses above the 200-day moving average while both of the averages are rising. As shown in the chart below, oil experienced a golden cross yesterday. Since 1984, there have only been six prior golden crosses for oil. The last one occurred way back in 1999. Interestingly, in the week following all of the prior golden crosses, oil was down every time for an average decline of 4.86%! The average returns turn positive over the one, three, and six months, with the three month time frame the most positive.
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