GO
Loading...

S&P 500 Nears ‘Ultimate’ Death Cross: SocGen

The S&P 500 index is on the verge of hitting an “ultimate” death cross, where the market’s 50-month moving average falls below the 200-month average, according to a research note by Societe Generale.

Death Cross
Nicholas DeVore | Stone | Getty Images
Death Cross

A death cross is the shape made on a chart when a market’s long-term moving average breaks above its short-term moving average or support level. It is seen as a sign of a looming bear market, or a cue to sell.

In the Societe Generale note, published on Monday, strategist Albert Edwards said the last time the S&P 500 came close to a monthly death cross was in 1978, “towards the end of the 1965-82 secular bear market.”

Edwards added that Japan suffered a monthly death cross in 1988, “and 14 years later we are still in the firm embrace of the bear.”

In a further recessionary sign , Edwards said aggregate monthly analyst optimism data had slid below 2011 and 2010 lows to under 40 percent. “These data are entirely consistent with a U.S. already in recession,” he said.

For another look at the S&P 500, click here.

— By CNBC.com's Katy Barnato

Contact Europe News

  • CNBC NEWSLETTERS

    Get the best of CNBC in your inbox

    To learn more about how we use your information,
    please read our Privacy Policy.
    › Learn More

Europe Video

  • The FBI have stated that North Korea's government is responsible for the Sony attack. Neil Ashdown, deputy head of Asia analysis at IHS, weighs in, saying that it's difficult to "definitively attribute" a hacking attack to a particular group or state.

  • What were the main highlights of the EU Summit in Brussels? CNBC's Hadley Gamble gives you the lowdown.

  • Carnival Cruises earnings have beaten expectations in its fourth quarter, with lower fuel prices being a great help, says David Dingle, UK chairman of Carnival Cruises.