It's Not Over Until It's Over

As promised from Thursday’s post, the identification of the graphs is as follows (Contrary Investor and StockCharts:

Over the twelve plus year period the 50- and 200-day EMA lines have crossed four times. Once in 1998, the 50-day EMA briefly pierced the 200-day EMA to the downside, suggesting a move into bear territory. The next cross to the downside was seen in late 2000 (dot.com debacle), warning of an equity market plunging into its largest and most extended bearish episode in many years. It was not until May of 2003 that the 50-day EMA crossed back up through the 200-day EMA. And, in January 2008, we have seen a cross to the downside. Until the 50-day EMA moves back up above the 200-day EMA, my position is to assume a defense investment position, such as being invested in a money market fund and/or inverse ETFs like DOG, SDS, DXD, and QID. Also, had one followed this very simple indicator over time, one’s financial health could have been greatly enhanced.