The technical signal of the moment is the “Death Cross,” when the 50-day EMA falls below the 200-day EMA. [What You Need To Know About EMA.]
Looking back, the Death Cross preceded all 10 bear markets since 1970. However, there were also seven other Death Crosses that did not result in a bear market.
Studies have shown that the more complex a strategy is, the less likely it is to be used. That’s why we prefer simple strategies, such as the one we follow: trend following. While such a strategy may not tell you “when” something is going to happen, that’s the whole point. No one knows what’s going to happen, so it simply seems more prudent to invest based on reality. You can read more about trend following in this comprehensive article, and you can put trend following to use by signing up for alerts on our site.
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Sumin Kim contributed to this article.