S&P 500 Death Cross 2022: What Does It Mean for Stocks?

The S&P 500 has hit a major turning point in 2022 with a “death cross” pattern forming, but what exactly is that?

An image of a bear figurine in front of blurred computer screens displaying stock charts representing S&P 500 Death Cross 2022.

Source: Shutterstock

A death cross occurs when an index’s 50-day moving average falls below its 200-day moving average. With that S&P 500 seeing a death cross, it means 2022 could slide further into a bear market.

It’s also worth mentioning that a death cross is often accompanied by heavy trading volume. This comes as investors seek to make a profit before the bear market takes over. To be clear, just because we’ve hit a death cross doesn’t mean a bear market has to follow.

While the S&P 500 just hit its death cross, investors have been expecting it for some time. That’s due to the Nasdaq 100 already hitting its death cross at the start of the month. Also, the Dow Jones Industrial Average hit a death cross as well earlier this month.

The last time the S&P 500 hit a death cross was in 2020. That was due to the stress put on the market from the oncoming Covid-19 pandemic. Considering the war between Russia and Ukraine, rising inflation in the U.S., and reemerging worries of coronavirus lockdowns returning, it makes sense the market would experience another death cross right now.

While this means investors will want to take care to avoid profit losses, there could also be a light on the way: the golden cross. This is the exact opposite of a death cross and is often a sign that a bull market is on the way.

Makes sure to keep death crosses and golden crosses in mind when investing in the near future.

Investors looking for more stock market news will want to stick around!

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On the date of publication, William White did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Article printed from InvestorPlace Media, https://investorplace.com/2022/03/sp-500-death-cross-2022-what-does-it-mean-for-stocks/.

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