In July 2012 Albert Edwards, an analyst at Société Générale, published a note warning that the S&P 500 Index was nearing an ultimate death cross. An ultimate death cross is when the 50-month moving average moves down through the 200-month moving average.
The 2013 edition of the Almanac plotted these moving averages for a composite UK stock market index for the period 1945 to today.
In those 67 years there had been no ultimate death cross. We wondered how common they might be and so plotted another chart for the period 1845-1945 (see below).
As can be seen for the 100 years prior to 1945, ultimate death crosses were not uncommon. In fact, the 50-month MAV was below the 200-month MAV (shaded in the chart) for 51 of the 100 years.