Is the Death Cross Really Deadly?

There has been a lot of talk, lately, about an impending death crosses – where the 50-day moving average drops below the 200-day moving average. It’s supposed to be a harbinger of severe bear markets. Yes, the S&P 500 is about to do this (the white arrow below.)

And, it’s possible that it will add to the bearish pressures on stocks. It’s also possible that it will mark a bottom.

Sure, in 2008 a death cross was followed by a long, protracted bear market.

But, in 2020, the damage had already been done and SPX was well off its lows and on its way to new highs.

It would be easier to be afraid of a death cross if the Fed and other central banks weren’t so involved in propping up markets – something they’ve greatly perfected since 2008. We’ll look at the case for/against it making a difference.

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