“Death Cross” Pattern
The bearish “death cross” pattern has just appeared in the charts of the Russell 2000, for the first time in 17 months, and Nvidia’s stock, for the first time in three years.
That pattern is when the 50-day moving average crosses below the 200-DMA. Many on Wall Street see that bearish crossover as marking the spot a shorter-term pullback graduates to a longer-term downtrend.
The Russell 2000’s last death cross popped up at the Oct. 13, 2023 open. The small-cap tracker fell another 5.6% before it bottomed two weeks later at three-year low.
For Nvidia, it’s the first death cross since April 20, 2022. The stock tumbled another 47.7% before it bottomed six months later at a two-year low.
For the S&P 500, the 50-DMA is still about 174 points above the 200-DMA, and has been declining by an average of five points a day over the past five days.