قالب وردپرس درنا توس
Home / Business / A looming death cross for the S & P 500 highlights the stock market in shreds

A looming death cross for the S & P 500 highlights the stock market in shreds



The S & P 500 Index will participate in the series of market benchmarks that form the dreaded Wall Street chart pattern: the Death Cross.

Read: Bearish death crosses appear again and again, this time in retail and technology stocks

A death cross is set up in the S & P 500

SPX, -1.93%

with the 50-day moving average at 2,763.56 and the slip margin below the 200-day moving average of 2,762.08, according to FactSet ,

A death cross is what chart observers refer to as the point where the 50-day tracker, a short-term trend tracker, exceeds the 200-day limit used to define the longer-term trend. Many believe that the cross marks the point at which a short-term decline to a longer-term downtrend graduates.

Read: How a looming S & P 500 death cross could chase away the Santa rally on the stock markets

In the face of the S & P 500% close to 2% on Thursday ̵

1; along with the Dow Jones Industrial Average collapses

DJIA, -2.23%

and the Nasdaq Composite

COMP, -1.05%

– A breach of the short-term trendline of the large-cap index among the 200-day days appears to be already established on Friday.

If so, according to Dow Jones Market Data, for the first time since March 22, 2016, this would be below the 200-day price of the S & P 500.

The step for the benchmark comes In view of a number of bearish patterns that have surfaced on the stock and bond markets, growing concerns about the durability of a bull run in equities, which has been going on for about a decade since the vital signs of the economy in a long time, too, were strong. runs when the recovery from the 2007-09 financial crisis is measured.

The slump on Thursday – signs that bond and stock markets closed on a day of mourning after US President George H.W. Bush – has been credited with further indications that a US-Chinese trade spree may not be resolved soon, even after it was described that weekend relaxation was forged on the sidelines of the G-20 summit in Argentina, giving investors reasons be sanguine.

The Canadian authorities reportedly arrested the head of finance at Huawei Technologies Co. at the instigation of the US. The fears of a renewed escalation of tensions between the two largest economies in the world have been removed. Chinese officials demanded the release of Meng Wanzhou, who was arrested on December

Some strategists have pointed out that a number of death crosses have recently appeared on the market – a death cross that has formed in the Russel 2000 small-cap index

RUT, -1.52%

last month – can be used as a tool for those who are able to redeem besieged assets.

"As I said in the previous article on the creation of the Cross of Death in the Nasdaq Composite, the appearance of this rare omen does not necessarily mean the end of the world. Since the market cycle began in March 2009, it has been four times in the S & P 500, "wrote Nathan Edwards, financial planner and asset manager of IMG Management, on a recent blog.

Tomi Kilgore of MarketWatch writes that the ominous formation is also a sign of how vicious the stock markets have been in recent weeks. There were death crosses in more than half of the S & P 500's eleven sectors and some of the index constituents are in the bear markets after falling at least 20% in the last high segment. Both the S & P 500 and the Nasdaq are in a correction, usually defined as a 10% decline from a high.

Crude oil futures play a role in these unsightly technical developments

CLF9, -3.69%

have yielded, and bond yields on security investments are plummeting – fast. The 10-year treasury statement

TMUBMUSD10Y, -1.60%

returned 2.85% at the last review, compared to 2.92% on Tuesday. Bond prices rise with falling yields.

In addition, the difference between the 10-year benchmark Treasury and the 2-year Treasury Note decreases

TMUBMUSD02Y, -2.88%

known as the yield curve, is flattening and threatening to reverse, a feature of the fixed income market that has forecast any recession since 1975.

Read: Painful Short Squeeze Strikes on Bond Markets in the midst of High Yield Waste

Developments in bonds and oil suggest investors are dubious about the sustainable health of the global economy over the next few years.

See: Oil futures decline as OPEC delays the decision on production levels

While this may be a good opportunity for long-term investors, at the moment it seems that this is not all right with this one Bull market. Or, as Michael Antonelli, stock trader at R.W. Baird & Co., told The Wall Street Journal Thursday, "Everything is currently out of control."

Important information for the US Dealing Day. Subscribe to MarketWatch's free Need to Know newsletter. Sign up here.


Source link