Golden Cross vs. Death Cross

Both these technical indicators are used as long-term forecasts for a stock or the market: a golden cross signals an upcoming potential bull market while a death cross suggests an upcoming potential bear market. Both occur when a short-term moving average crosses over a long-term moving average.

Golden Cross

A golden cross occurs when a stock or the market’s short moving average crosses over a long-term moving average, and signals a definitive upward trend/rally in the asset. There are 3 stages to a golden cross: 1) a downtrend/sell-off, 2) the shorter moving average crosses over the longer moving average and 3) the continuing uptrend, which leads to rising prices.

A Golden Cross is considered a bullish indicator. When the fast moving average crosses above the slow one, the assumption is that the market’s trend turned upward and will continue to do so.

Death Cross

On the other hand, a death cross occurs when the short-term moving average trends downwards and crosses the long-term moving average, going in the opposite direction as a golden cross.

A Death Cross is considered a bearish indicator. When the fast moving average crosses below the slow one, the assumption is that the market’s trend turned downward and will continue to do so.

MACD crossovers in general

TOGGLE uses a 50D moving average for the short term and 200D for the long term moving average, but it’s up to the discretion of the trader. Some analysts use a 50D and 100D moving average, but regardless of the choice, the term always refers to a short term moving average crossing over a long-term moving average.