The S&P 500 index is set to join the ranks of market benchmarks forming that dreaded Wall Street chart pattern: the death cross.
A death cross is setting up in the S&P 500 SPX, -2.05% , with the 50-day moving average at 2,763.56, on the brink of slipping below the 200-day moving average of 2,762.08, according to FactSet data.
A death cross is what chart watchers refer to as the point where the 50-day — a short-term trend tracker — crosses below the 200-day, which is used to define the longer-term trend. Many believe the cross marks the point where a shorter-term decline graduates to a longer-term downtrend.
Given the S&P 500’s nearly 2% nose dive on Thursday — collapsing in tandem with the Dow Jones Industrial Average DJIA, -2.37% and the Nasdaq Composite COMP, -1.27% — a breach of the large-cap index’s short-term trend line beneath the 200-day seems likely to take hold as early as Friday.
If so, it would mark the first time the 50-day MA has fallen below the 200-day for the S&P 500 since March 22, 2016, according to Dow Jones Market Data.
The move for the benchmark comes amid a series of bearish patterns that have cropped up in equities and fixed-income markets, highlighting growing concerns about the durability of a bull run in stocks that has lasted about a decade as the economy’s vital signs have also been strong, in a long-running if measured rebound from the 2007-09 financial crisis.
Thursday’s slump — coming after bond and stock markets were closed during a day of mourning following the death of the 41st U.S.