The S&P Experienced a Death Cross. Here’s the Bright Side.

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Illustration by Elias Stein

The S&P 500 has performed poorly this year, down about 6.4%. This past Monday, it got scary in a Harry Potter sort of way: The benchmark experienced a death cross.

A death cross occurs when the S&P’s 50-day moving average slips below its 200-day average. This one saw the S&P’s 50-day average drop to 4465, below the 200-day 4467. This suggests something is awry in stocks, not a surprise. In normal times, particularly when stocks are rising, the average of recent prices is higher than the 200-day average, which includes prices…