What is a Death Cross?
Death crosses are situations within a financial market where there is a convergence of short-term averages with long-term averages. This phenomenon of the two averages effectively crossing over one another usually indicates that the value of the security involved will shortly begin to decline or “die.” When a death cross takes place, many analysts see this as an indicator that the market is heading away from a bullish turn and may begin to move toward a bear market situation. Perhaps the classic example of securities developing a death cross involves comparing the fifty day moving price or average with the two hundred day moving price. Using charts and graphs to track the movement of the performance of the securities, it is possible to note that the two averages are beginning to move into a convergent pattern. As the fifty-day average and two hundred-day averages meet and cross over one another, the appearance on a graph will look very much like a cross. At the same time, the end resul
