Death Cross

A Death Cross is a crossover resulting from a security's short-term moving average breaking below its long-term moving average or support level. The Death Cross is the opposite of the Golden Cross chart signal.

Death Cross

A Death Cross is a crossover resulting from a security's short-term moving average breaking below its long-term moving average or support level. The Death Cross is the opposite of the Golden Cross chart signal.


Death Cross Identification

A Death Cross occurs when a nearer-term 50-day moving average falls below a longer-term, 200-day moving average.  The Death Cross should occur with high trade volumes as traders exit the market.

Stock chart showing a Death Cross

DEATH CROSS Intrepretation

The death cross is a bearish indicator and is seen as a time to sell by many analysts.  Over the past 100 years, the Death Cross has done well in identifying bear markets.

However, statistics over the last 20 years do not support this observation as the Death Cross has not outperformed random chance.  This has led some researchers to suggest that there has been a permanent change in the markets with regards to moving averages.

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