On CNBC’s Mad Money, Jim Cramer runs a weekly segment called, “Am I Diversified,” where diabetic retirees call in and seek Jimbo’s input as to how well they can spread out their losses via diversification techniques. In that spirit, I am going to play that game too. Only this time, I am going take an admittedly hardcore bearish stance. The daily charts of the stocks seen below all show a “death cross,” where the 50 day moving average crosses down below the 200 day moving average. This cross reliably illustrates that a former uptrend (as seen in the inclining/flattish 200 day moving average) has grown long in the tooth, and the fresh downtrend is taking hold (as seen via the down sloping 50 day moving average). Basically, the presumption is that a bear market is now upon us.
Moreover, all five firms are considered best in breed in their respective sectors, and have very large market capitalizations, none less than $29,500,000,000. They are: $FCX (my “tell”), $GILD, $GOOG, $GS and $KO. In my charts, look for the blue line (50 day) crossing below the yellow line (200 day). I fully admit that I am cherry picking these five stocks to illustrate the death cross.
Assuming the death crosses hold, I would like to hear your comments over the weekend.
I would like to know, specifically:
Can the market successfully rebound with these five mega cap names in bear market mode?
It has been a long and intense couple of weeks. So, feel free to vent anything else that is on your mind in the comments section, when you guys check in to iBC periodically over the weekend.