AHEAD OF THE TAPE: Dark Omen Threatens Stock-Market Bulls - WSJ.com (WSJ's Kelly Evans explains the death cross -- the S&P 500's 50-day moving avg. crossing below its 200-day moving avg.)
She illustrates well the ambiguity of this indicator, showing how half the recessions since 1972 were preceded by death crosses. I've been hearing a lot of analysts on CNBC making a big deal out of it, but Ms. Evans points out that the hype surrounding a death cross puts downward pressure on investor sentiment, making it a self-fulfilling prophecy. Her counterpoint is that over the last 40 years, death crosses were followed by an average 6-month gain of 5% in the S&P 500. Here's hoping this one's above average.
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