We have begun collecting Silver Cross Index and Golden Cross Index data for four new industry groups, and StockCharts.com has back-calculated data for two years: Biotechnology (IBB), Regional Banking (KRE), Retail (XRT), and Semiconductors (SMH ).
First, let’s cover what the Golden/Silver Cross Indexes are:
- The Golden Cross Index (GCI) shows the percentage of stocks on BUY signals from the LT trend model (50-EMA > 200-EMA). The opposite of a Golden Cross is the “Death Cross” – These stocks are in a bear market.
- The Silver Cross Index (SCI) shows the percentage of stocks at buy signals from the IT trend model (20-EMA > 50-EMA). The opposite of the Silver Cross is a “Dark Cross” – These stocks are at least in a correction.
Let’s take a look at our new industry group, Golden/Silver Cross Indexes:
Since mid-January we have seen the relative strength line fall. Note what was going on “under the hood” though. Attendance increased and the Silver Cross Index rose. Relative strength was misleading. During the same period, the IBB is in a rising price trend.
Regional Banks (KRE) has seen participation skyrocket. The relative strength line coincides with attendance, suggesting an overall strength. Note that the Silver Cross Index moves vertically up. This is an industry group to watch out for.
The Silver Cross Index and Golden Cross Index are rising well on XRT. Participation is robust. Note that when the Silver Cross Index came out, the relative strength had not yet started to rise sharply. Participation started to improve even before the Silver Cross Index would have gotten us into the rally earlier.
The SMH chart is a bit disjointed, mainly because there are fewer members in this industry group of ETFs. We know this group has shown amazing leadership and if you look at the numbers it’s still going strong. Note that we just got a buy signal on the LT trend model Golden Cross on SMH when the 50-day EMA surpassed the 200-day EMA. This is one of the reasons why we are seeing the Golden Cross Index rise vertically. If the group itself gets a Gold Cross, stocks are likely to see it the same way. All prices are currently above their 20/50-day EMAs and this has also pushed the Silver Cross Index to 100%. This tells us that we should see the rally continue. As soon as the attendance numbers start to break down, we will be warned.
Diploma: Adding participation to charts gives you an advance notice of inner strength. We now have Golden Cross indices and Silver Cross indices for all major indices, all sectors and now six industry groups (Gold Miners (GDX), Transportation (IYT) and now Regional Banks (KRE), Semiconductors (SMH), Retail (XRT ) and biotechs (IBB)). These annotated charts are only available for daily review by DecisionPoint.com subscribers.
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Helpful DecisionPoint links:
List of DecisionPoint alert charts
DecisionPoint Golden Cross/Silver Cross Index Chart List
DecisionPoint Sector Chart List
Price Momentum Oscillator (PMO)
Swenlin Trading Oscillators (STO-B and STO-V)
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Erin Swenlin co-founded DecisionPoint.com with her father, Carl Swenlin. She started the daily DecisionPoint blog with Carl in 2009 and now works as a consulting technical analyst and blog contributor at StockCharts.com. Erin is an active member of the CMT Association. She holds a master’s degree in information resource management from the Air Force Institute of Technology and a bachelor’s degree in mathematics from the University of Southern California.
