& # 39; Golden cross & # 39; adds shine to the S & P 500 index

NEW YORK (Reuters) – A rally on Monday in the S & P 500 has resulted in a technical landmark, known as the Golden Cross Scheme, which could, if history is true, point to more short-term gains. term.

Considered as a bullish signal by market badysts and other market observers, a gold cross is formed when the short-term moving average daily closing price of an index exceeds the longer-term moving average.

It's formed Monday for the S & P 500 Index, for the first time since April 2016, with recent gains in the US benchmark for large stocks pushing the moving average over 50 days of the index above its 200-day moving average. GRAPHIC: golden cross "triggered, click on tmsnrt.rs/2HQDB6I

The Dow Jones Industrial Average had triggered a golden cross about two weeks ago, but as an investment strategy, the golden cross has always been a more reliable indicator of the future performance of the S & P 500, Sam said. Stovall, chief investment strategist at CFRA in New York.

"Statistics say that's the case, at least since 1990," he said.

The use of the Golden Cross strategy has resulted in a return of at least half the market since at least 1990, based on the compound annual growth rate of the S & P 500, Stovall said.

The S & P 500 index rose 1.16% on Monday, after closing its first quarter on Friday with its best quarterly gain since 2009, fueled by the optimism sparked by recent US-US trade talks. United and China.

The index, which triggered a cross of the dead in early December when the 50-day moving average fell below the 200-day moving average, has now risen more than 20% since the close of December 24 , hollow of the end of the year sale. .

Everyone on the market does not follow such signals or consider them important, but some say that it's good to see something that confirms the trend of the stock.

"This is another positive point in a fundamentally positive context. That's one more thing on the right side of the market, "said Frank Gretz, market badyst and technician at Wellington Shields & Co in New York.