The “Death Cross” is a supposedly bearish event which is characterized by the 50 day moving average crossing down through the 200 day moving average. When a market experiences a “death cross” it is supposed to be a negative for the market going forward. WHen the 50 day MA undercut the 200 day MA in GS on August I was skeptical that such a signal could have any value. I also stated that the Death Cross in the IWM two weeks ago might be a good contrarian indicator. It is easy to rip on any technical event as not having value, because there are other examples I could have come up with where the market did follow through to the downside. The point is to keep an open mind and don’t be sucked into a position because of a technical event with a cool sounding name. Only price pays.
For more information and some stocks which appear ready to experience a death cross
TRADE IDEAS maintains a free screen for them.