The Death Cross Foretold Everything

Markets are tanking today, and traders have various theories about why.

But here’s one thing that technical analysts and other fans of chart-reading will be interested in.

Just a few days ago, the Russell 2000 (an index of small-cap stocks) made a “death cross.”

That’s when the 50-day moving average (the average of the last 50 days of the index) fell below the 200-day moving average (the slower-moving average of the last 200 days of the index).

Here’s what it looked like.

For purists, the definition of “death cross” is defined by Stockopedia as: “On a stock chart, the Death cross occurs when the 50-day MA falls below the 200-day MA. As the name implies, a Death Cross is associated with sharp downward price”

Of course, there are other fundamental explanations for the selloff, including the recent rise in short-term interest rates.

And Dave Lutz of Stifel, Nicolaus cited these things that traders are talking about:

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