Wednesday, March 25, 2020

Some GOOD News For The Market: "A bearish ‘death cross’ has appeared in the Dow’s chart"

The writer of this piece, Tomi Kilgore, is one of the most underappreciated scribes in business journalism, he tends to get the facts and get to the point without a lot of fluff or slant.
From MarketWatch, Monday March 23:

Last death cross popped up three days before the Christmas Eve 2018 bottom 
A bearish “death cross” pattern has appeared in the Dow Jones Industrial Average’s chart for the first time in over a year, which is a warning of further losses in the near term.

But recent history suggests the pattern might not be the death knell for the stock market that the name implies, as the past two death crosses appeared much closer to the bottom than the previous top.
The Dow DJIA, 5.259% dropped 913.21 points, or 4.6%, to close Friday at a 3 1/2-year low of 19,173.98, and has now dropped 35% since closing at a record 29,551.42 on Feb. 12 amid growing fears of the economic impact of the COVID-19 pandemic. The Dow has stretched its streak of not producing back-to-back gains to six weeks. Read Market Snapshot.

The Dow’s 50-day moving average fell to 27,097.53 from 27,290.53, according to FactSet, while the 200-day moving average is at 27,149.58, down from 27,184.16.

A death cross occurs when the 50-day moving average (DMA), which many chart watchers use as a short-term trend tracker, crosses below the 200-DMA, which is widely viewed as a dividing line between longer-term uptrends and downtrends. The idea is the cross marks the spot that a shorter-term selloff can be defined as a longer-term downtrend....MORE