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Bull Market? Half The S&P 500 Are In The "Death Zone"

This week saw The Dow encounter its first "death cross" - when the 50-day moving average crosses below the 200-day moving average - in 4 years. The indicator, often used to signal trend changes (down in this case) has yet to be witnessed in the S&P 500 though, but has been a useful signal at major market turning points in the past (e.g. late 60’s, early 70’s, the dot.com crash and recently the GFC). However, while breadth in this 'market' remains weak by any measure, we note that a stunning 50% of the S&P 500 components are now in the 'death zone'.

 

 

Source: AMP Capital