Odds are pretty high that you’ve heard that the S&P 500 is about to witness a “Golden Cross” which is where the 50MA crosses above the 200MA (see Golden cross info here)
The future price movement when a Golden Cross takes place has an above average track record, yet its anything from bullet proof on the direction of stocks in the future….sometimes stocks don’t move a ton higher after this crossover takes place and sometimes they don’t move much lower when the “Golden Cross Goes Dark” either.
Is a Golden Cross about to take place in a sector that has a good track record for predicting the future prices of the stock market? Check out the moving average price action in the high yield funds below.
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I remain of the belief that the price action of high yield mutual funds can be very helpful per helping investors build portfolios and as leading stock market indicator. If you are a believer that the Golden Cross is a bullish sign, you will like that that a cross is about to take place in these high yield funds.
Not only is a cross about to take place, the funds are breaking above overhead resistance and may well have created a “bullish inverse head & shoulders pattern too. Golden Cross aside, the price action in these funds remains positive and if history is a guide this upward price movement more often than not, is a good sign for the short-term price action of equities.
Will upward price action in high yields help the 500 Index break above its 800 pound resistance line? (see 800 pound line) Stay tuned!