The Death Cross And Market Bottoms (Technical Analysis)

(11min)

Summary

  • The “death cross” signals a market correction and suggests a more cautious investing approach.
  • The correction from this year’s market peak is currently in a range that has only occurred 7% of the time historically, with the market declining 19.4% from peak to trough.
  • The current death cross collides with deeply oversold technical readings, which typically suggest markets are near short-term lows rather than starting more significant declines.

Close-up trading screen with falling stock chart and moving averages from on a trading monitor.

Torsten Asmus/iStock via Getty Images

In financial markets, few technical patterns generate as much attention and anxiety as the death cross. This ominous-sounding term refers to a crossover on a price chart when a short-term moving average, most commonly the

This article was written by

32.43K Followers

After having been in the investing world for more than 25 years from private banking and investment management to private and venture capital; I have pretty much "been there and done that" at one point or another. I am currently a partner at RIA Advisors in Houston, Texas.

The majority of my time is spent analyzing, researching and writing commentary about investing, investor psychology and macro-views of the markets and the economy. My thoughts are not generally mainstream and are often contrarian in nature but I try an use a common sense approach, clear explanations and my “real world” experience in the process.

I am a managing partner of RIA Pro, a weekly subscriber based-newsletter that is distributed to individual and professional investors nationwide. The newsletter covers economic, political and market topics as they relate to your money and life.

I also write a daily blog which is read by thousands nationwide from individuals to professionals at www.realinvestmentadvice.com.

Recommended For You

About SPX Ticker

SymbolLast Price% Chg
52 Week High
52 Week Low
Open
Prev. Close
Compare to Peers

More on SPX

Related Stocks

SymbolLast Price% Chg
SP500
--
SPX
--