Can S&P 500 shrug off 'deathcross' in coming weeks?

Near-term volatility expected

clock • 2 min read

The S&P 500 entered its first 'deathcross' since 2011 on Thursday, a formation which analysts fear could herald further volatility in the near-term.

A 'deathcross' occurs when an index's 50-day moving average falls below its 200-day trend line. Traders fear this kind of formation could signal a short-term drop is about to become a wider slump. For example, the Dow Jones Industrial Average formed a deathcross on 11 August and fell 11% over the next two weeks. The S&P 500 index has only recorded ten other 'deathcrosses', according to US wealth manager Bespoke Investment Group. "[The move] is extremely negative, and it suggests that investors should be prepared for more volatility in the near term," wrote Bespoke in a note to c...

To continue reading this article...

Join Investment Week for free

  • Unlimited access to real-time news, analysis and opinion from the investment industry, including the Sustainable Hub covering fund news from the ESG space
  • Get ahead of regulatory and technological changes affecting fund management
  • Important and breaking news stories selected by the editors delivered straight to your inbox each day
  • Weekly members-only newsletter with exclusive opinion pieces from leading industry experts
  • Be the first to hear about our extensive events schedule and awards programmes

Join now

 

Already an Investment Week
member?

Login

More on US

JP Morgan AM's Karen Ward: Investors should not 'trade' the US election
US

JP Morgan AM's Karen Ward: Investors should not 'trade' the US election

Focus on policy impact on inflation

Valeria Martinez
clock 14 March 2024 • 2 min read
Royal London AM launches Irish-domiciled US Equity fund
US

Royal London AM launches Irish-domiciled US Equity fund

Managed by Chris Parr

clock 13 March 2024 • 1 min read
LGIM CIO Laud: Magnificent Seven could be reaching bubble territory
US

LGIM CIO Laud: Magnificent Seven could be reaching bubble territory

Favours thematic approach to AI

Valeria Martinez
clock 11 March 2024 • 2 min read
Trustpilot