The "Death Cross": What it is and how to trade it

Posted on by The INO.com Team

In today's short video, we look at two important aspects of the market - one is an intraday technique which I will show you how to use to determine where markets will turn, and the other is the infamous "death cross".

The death cross does not occur that often, in fact, in the last 2 1/2 years we've only seen this happen three times. The most recent occurred just last week and is something that every investor and trader should pay close attention to. I believe that this video will help you understand what the death cross is and how you can construct it and use it in your own trading. A lot of traders and investors watch this very closely so you should too.

As always our videos are free to watch and there's no need for registration.

If you like the video please feel free to comment on our blog and give us your thoughts on the market.

All the best,
Adam Hewison
President of INO.com

5 thoughts on “The "Death Cross": What it is and how to trade it”

  1. It's certainly not 100% - in fact, IIRC just over half actually materialize into some sort of intermediate to long-term downtrend. The key seems to be having the 200 DMA on a downward trajectory when the cross takes place (which this cross does not, at least with regard to SPX, but it's darn close). When 200 DMA is down on the death cross, IIRC that percentage jumps to ~85% historically.

    I think we rally this week on low volume, no big economic news and hit resistance on SPX at about 1075ish, then it's time to get short!

    1. John,

      I loved your comment. Very timely given today's market action.

      The Death Cross has to be considered a long term indicator and not capable of predicting short term moves.

      All the best,
      Adam

  3. HI Adam,

    Thanks for the "Death Cross" video. I'm wondering if a "Death Cross" is regarded as significant when it happens on an individual stock.

    jsaman

    1. Jsaman,

      Thank you for your feedback.

      I would say any time you have a 50 day moving average crossing a 200 day moving average is a significant event. it doesn't matter if it is an index or in an individual stock. Most often people refer to this indicator in regards to an index.

      All the best,
      Adam

      All the best,
      Adam

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