death cross back in November of 2011. A moving average crossover is a lagging technical indicator because it generates a delayed signal that a trend reversal has occurred, making this a potentially significant event.
When a shorter-period moving average crosses above a longer-period moving average, as has happened with silver,
it is commonly referred to as a “bullish crossover”. A bullish
crossover implies that positive momentum is prevailing as the
near-term price increases of a security outpace the longer-term average
price, thus signaling a positive trend reversal.
The golden cross moniker is specifically reserved for the 50 day
average crossing the 200 day average. The chart below shows this pattern
in SLV as the 50 day MA (blue line) eclipsed the 200 day MA (yellow
line) in the past few days.
Some may not buy into the technical analysis side of the equation, but for many this signals a bullish momentum that
could propel silver forward for weeks to come.
The precious metal has
already been performing quite well, now with technical indicators
aligning in its favor, silver may be set for a strong close to 2012.
Investors will want to keep a close eye on funds like the iShares
Silver Trust (NYSEARCA:SLV) as well as the Silver Miners ETF
(NYSEARCA:SIL) as they will likely be big movers in the coming trading