S&P 500 and Nasdaq 100 Analysis: Golden Cross, Golden Opportunity

April’s stock plunge came at a time when the Big Money Index (BMI) was violently rising (the BMI is a 25-day moving average of Big Money buys and sells netted). So, money was moving into the market.

But the prevailing narrative at the time was how it was all a negative omen for equities. That wasn’t true. When money is flowing into stocks, markets have nowhere to go but up. It really is that simple.

Nasdaq Golden Cross

How do we know money was flowing in? Well, the Nasdaq 100 Index formed a golden cross last month. This occurs when the 50-day moving average crosses above the 200-day moving average.

Check it out:

There’ve been 17 golden crosses prior to the recent formation:

Is the setup good for stocks? Based on a quick view above, it appears so. Data shows how technology stocks continue to gain after a golden cross scenario:

The reason for the more recent focus (since 2009) in the chart above is it seems to mirror what’s happening today…more on that soon.

Why the rush of inflows? Money was flowing in because golden cross, golden opportunity.

SPX Golden Cross

Now let’s look at the S&P 500. Here’s what happened to the S&P 500 when the death cross happened:

Now we are staring at another golden cross situation. Below you will notice the last time this signal flared was in January 2023:

Using weekly data going back 30 years, we found 14 prior golden crosses. Stocks have done well afterwards, historically:

Again, since 2009, the numbers are even better after a month.

But now let’s put all this technical talk into perspective.

Golden Opportunity

Where does this all lead? Well, it’s starting to produce forced buying from Big Money investors. That’s when big-time players must catch up to the indices, sending stocks upwards quickly.

This is the reason for that “since 2009” data above. Here’s what Big Money forced buying looked like during COVID:

After the extreme capitulation, stocks slowly established momentum (i.e., the buildup of green shoots in the chart above). Then about three months after the plunge, a blowoff top of buying took place as Big Money tried to rectify its overselling ways from earlier in 2020.

A similar pattern is shaping up in 2025:

Now, this won’t last forever, just as it didn’t in 2020.

But what really matters is when two major indices each form golden crosses, outlier stocks are poised to outperform. And that pushes markets higher.

Call it a golden opportunity.

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