The golden cross occurs when a short-term moving average crosses over a major long-term moving average to the upside and is interpreted by analysts and traders as signaling a definitive upward turn in a market.

There are three stages to a golden cross:

• A downtrend that eventually ends as selling is depleted
• A second stage where the shorter moving average crosses up through the longer moving average
• The continuing uptrend, hopefully leading to higher prices.

Conversely, a similar downside moving average crossover constitutes the death cross and is understood to signal a decisive downturn in a market.

The death cross occurs when the short term average trends down and crosses the long-term average, basically going in the opposite direction of th...