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Market Extra: How a looming S&P 500 death cross could chase away the stock market’s Santa rally

Barely 16 points stand between the S&P 500 and the death cross and when that dreaded threshold is breached, investors may have to kiss the Santa rally goodbye this year.

Analysts at Bespoke said that the large cap index, absent a dramatic rally, is likely to see its 50-day moving average fall below the 200-day moving average which will form a death cross. The pattern , when confirmed, is often viewed by strategists as an early warning signal of a bear market, though when it comes to the S&P 500, it hasn’t proven quite so ominous.

“The measure is supposed to capture accelerating downside momentum that typically kicks off long trends lower in price,” said the analysts in a report.

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