GLOSSARY // Technical Analysis
Death Cross
A death cross occurs when the 50-day moving average crosses below the 200-day moving average, marking the point where intermediate-term weakness has dragged below the long-term trend. It is the bearish counterpart to the golden cross.
The name oversells it. By the time a death cross prints, the stock or index has usually already fallen 15% or more from its high, and on major indexes a meaningful share of death crosses have marked spots closer to the bottom than the top: the S&P 500 crosses in 2018 and 2022 both came within weeks of significant lows. The signal reliably describes that damage occurred; it is unreliable about what comes next.
Traders who use it treat it as a regime filter, tightening risk or reducing exposure while the 50-day stays below the 200-day, rather than as a standalone sell trigger.
A stock peaks at 240 in June. By November it trades at 196, down 18%, and the 50-day average crosses below the 200-day at 214. A seller acting on the cross exits at 196. The stock chops between 180 and 205 for four months, then breaks down to 150, where the regime filter finally pays for its late start.
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Educational only — not financial advice. Definitions simplified for clarity; markets are messier than definitions.