What is the Golden Cross?
The Golden Cross is a phenomenon in which the short -term gliding average of the security in advance of the long -term gliding diameter for the same safety. At a time when this type of crossover takes place, investors and analysts consider it a hint that something happens on the market where security is traded. When the Golden Cross occurs, it is often considered a sign that the market is moving by a bull, which means that business levels are noticeably increasing.
An example of the Golden Cross would be a situation where the security experiences the rise in a sliding average in a short time frame, such as fifteen days. If this rise exceeds the previous movement of ascending security for a longer period of time, for example sixty days, then this type of cross has taken place and investment experts will begin to analyze the reasons for a sudden short -term ascension. The reasons for sudden growth often lead the leaders that it is time for investors to buy because the bull market is developing.
Not all investment experts automatically assume that the Golden Cross automatically means that the market is becoming a bull or is about to experience an increased volume of trading. Although there is a general consensus that the Golden Cross involving the high security profile is a signal that something will happen, there are those who believe that the activity could also indicate that the market will move in a bear direction, while trading somewhat slows down. This means that the only way to accurately use the Golden Cross as an indicator of the market is to assess the impact that the cross will probably have on other securities traded in the same market.
In some cases, the reasons for the Golden Cross are short -term. This phenomenon may be due to a combination of factors that develop influence on market movements for a short time before the market is adjusted and compensated that has an impact. This often applies in situations where there are obvious changes in business leadership, concerns about the outcome of political elections, or when natural executionerAstropha temporarily affects production in the industry. As soon as the impact of these events on investor's activity has been decreased, the market will be equal and will continue to respond to other factors that are likely to give a certain idea of where the market is going for a long time.