death cross

n. in financial markets, a situation where long-term and short-term averages converge, seen as evidence that values will decline. Subjects: English, United States, Business, Money & Finance, Jargon

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Citations: 1994 Reuters (Dec. 5) “Silver prices tumble on fund sales, chart factors”: A Death Cross happens when the 50-day moving average (price) turns down to cross the 200-day moving average from above. 2004 David Berman National Post (Ontario, Can.) (July 28) “Markets fine, except for ‘death cross’”: You probably won’t take any comfort in learning that a technical indicator for the Dow Jones industrial average is pointing to a so-called “death cross.” The nasty-sounding indicator pops up when an index’s 50-day moving average (or intermediate-term trend) dips below its 200-day moving average (or long-term trend). As the name suggests, it is often considered among technical analysts to be a bearish signal for stocks. 2005 Tomi Kilgore MarketWatch (Mar. 21) “Can chips help cushion the Nasdaq?”: In addition to all the support, the 50-day SMA crossed above the 200-day earlier last the week. This pattern is referred to as a “golden cross” and is viewed by many as a long-term buy signal (a downside crossover is known as a “dead cross” and is a sell signal).

Posted 29 Jul 04 | Permalink | Tell a Friend