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"Death Cross" Technical Formation Seen in Stocks

The last thing beat-up investors want to see right now is an often dreaded technical formation in the markets. Yet, that’s where we are after the S&P 500 has rallied hard off the lows achieved a week ago. For the first time in over a year, the S&P 500 is seeing its 50-day moving average cross below its 200-day moving average (see Yahoo Finance chart below) points out SunDial Capital Research. This is known on Wall Street as the “death cross,” and is commonly believed to be a bearish short-term indicator for markets. Not all technical analysts are concerned about this pattern re-emerging. “In terms of the moving average cross, there are so many other forces at play here, and the backdrop so historically complex, that I have not even considered the moving average cross a threat to risk appetite, but I imagine that if I am right and we V rally back to 2800/2950/3000, we will begin to run into overhead resistance around that cross and those averages,” explained Evercore ISI head …

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