The Infamous Death Cross Rears Its Ugly Head

Ironically, the stock market indicators I use have just turned bullish again. If tomorrow's stocks take out today's highs, the new bull market will be confirmed. The death cross, however, consists of the crossing of the 50-day (light blue on this chart) and 200-day (pink on this chart) simple moving averages. It is almost certain to occur unless the stock market moves about 800 points higher tomorrow. It's going to be interesting!

And Speaking of Global Alarm Signals, China Flashes the Infamous Death Cross

from Tomi Kilgore at WSJ:


While US investors’ eyes may be on Greece, China’s Shanghai Composite just produced a “death cross,” a longer-term bearish pattern in which the 50-day moving average crosses below the 200-day.
The “cross” appeared one day after the index fell below the January low, which confirmed a long-term ”double-top” reversal pattern (the tops were seen in April and November 2010).
The last time a “death cross” appeared, in March 2010, the index rose slightly for a month before starting a 3-month, 25% slide. US stocks may be able to rise with China going nowhere, but it’s very doubtful they can if China’s in a bear market.
The Shanghai Composite is down 0.8% today, and the Hang Seng is down 1.2%. Most of the rest of Asia is down as well.
China’s stock indexes are among the worst-performing in the world so far this year, which may not bode well for the US market, Barry Ritholtz warned this morning.