the S & P 500 On Monday, it ended on a somewhat fragmented observation, which is what is known as the technical “Death Cross”, a planned style often seen as an indication of the transition from the rise market to the bear market.
What happened: On Monday, the S&P 500 moving average for 50 days, which is often seen as an indication of the near -term direction, has declined to the moving average for 200 days, indicating a long -term direction. Technical analysts view this as a sign of reflection, a point where short corrections can turn into permanent directions.
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Traders informed the patterns of similar plans in Nasdak 100 The index on Wednesday, as well as focusing on the small judgment Russell 2000 The index, which witnessed the pattern almost a month ago.
For the S&P, this is the first death cross in three years, and it was the latest in March 2022, after which the standard witnessed huge fluctuations and decreased by 18 % by October 2022, and 25 % of its peak in January 2022, which officially confirms its entry into a declining area (a decrease of 20 % or more).
Why do it matter: According to analysts, the death cross is usually a “late indicator”, which means that it confirms the trends that have already occurred. Craig Johnson, Large market technician in Piper Sandler companies PIPR He said Marketwatch Instead of referring to more losses, it indicates the “Snap Back” gathering.
In note that you decompose nearly 100 years of data, Paul SianaTechnical strategic expert in Bank of America company PileHe wrote that at 52 % of the time this pattern occurred, the average losses of only 0.5 %, according to the report.
Ciana adds that although Death intersections were “generally not decisive”, there is the decisive telling him, whether the moving average for 200 days has finally decreased during the past five days. This indicates a larger space for “stocks for drift in the near future,” said Marketwatch.
The 50 -year -old Reuters analysis shows that the S&P 500 has seen 24 death intersections, and only in about 46 % of cases, the sales process has worsened after seeing the pattern, with a decrease of 19 % average.
Price work: the SPDR S & P 500 ETF TRUST spy 3.6 % decreased this month so far, followed Invesco QQQ Trust QQq Who tracks Nasdak 100 Index, and SPDR Download Jones Industrial Etf Trust Dia Decreased by 2.4 % and 3.4 %, respectively, so far this month.
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