On The Verge Of The “Ultimate Death Cross”
by Tyler Durden
In short: the recession is now here, just as it was in the fall of 2011 until global coordinated easing injected trillions and masked its impact, and will manifest itself unless the global central banks step up far more aggressively and tune out reality once again (this time with a half life that will be, well, half of the prior intervention).
And now, for the main event:
Finally I want to share with you news that the S&P is on the verge of an “ultimate” death cross (see chart below). This is where a 50-month moving average (currently at 1152) falls below the 200-month average (currently 1145). The Trend blogspot (link) tries to make some sense of this very rare event. They note that the averages came close to crossing in 1978 towards the end of the 1965-82 secular bear market, but just held. By contrast Japan suffered a monthly death cross in 1998 and 14 years later we are still in the firm embrace of the bear. Watch this space.