Death Cross on Dow. Nasdaq falls heavily. Energy flat. Gold...

Death Cross on Dow. Nasdaq falls heavily. Energy flat. Gold up.

Yes, dear Reader, I've succumbed to Headline Writer Syndrome. That's where a headline writer says something outrageous to catch the reader's attention.

So today - I've put in the Headline an outrageous term - Death Cross. And what exactly is that? Is it really as ominous as it sounds? I shall equivocate.

Maybe - or maybe not.

In Technical Analysis a Death Cross occurs when the 20-Day MA crosses below the 50-Day MA. (Or, alternatively, when the 50-Day MA crosses below the 200-Day MA.)

A 20/50 crossover supposedly gives a sell signal to traders/investors. Now, moving averages by their nature are lagging indicators, and 20-Day and 50-Day Moving Averages lag a lot. So a death cross usually occurs after the chart has fallen quite a bit, in fact, usually quite a lot. You can see that on the current Dow Chart above.

A Death Cross is anything but perfect as a sell indicator. In fact, the Dow now looks like it is putting in a bottom - so the fall could be over.

Maybe - maybe not. It could rally and hit resistance of either the 20-DMA or the 50-DMA and fall again - sell the rally. Or, the Dow could just keep on going straight up and test the recent high.

So - the Death Cross isn't something to worry about too much - but it is a signal that something isn't right with the market - watch for a rally and see what happens when it hits resistance.

Dow Jones +0.56%. SP500 -0.88%. Nasdaq -2.05%. Small Caps +0.89% (Another death cross.) Banks +1.93%.

Those results in the major indices are all over the shop. Blame reporting season.

The Dow only consists of 30 stocks. So an outsize move, as often happens in reporting season, can shift the Dow quite a bit, particularly if it is one of the larger components. (The Dow is cap weighted, i.e., the largest stocks have a much bigger weighting than smaller stocks in the Index).

Last night, American Express reported and rose 6%. It is one of the bigger stocks in the Dow Jones, so that result shifted the Dow to the upside. Netflix, in the Nasdaq, reported and fell nearly -10%. Meanwhile, NVIDIA, which is an AI stock and in the Nasdaq, fell 10% helping to shift the Nasdaq to the downside. Falls in Apple -1.22% and Tesla -1.92% didn't help the case for the Nasdaq.

SP500

SP500 remains in a steep down-trend and has been down six days in a row.

DZ Stochastic is now in deep oversold territy and beginning to flatten out. CCI has kicked up a little - so a move to the upside could come soon.

Commodities.

Commodities Index +0.47%. Energy didn't shift from its opening price 0.00%. Base Metals +1.39%. Agriculture +2.24%. Gold +0.31%.

Gold has been consolidating sideways since the previous Friday's big fall. Something has to give shortly.

Yesterday in Australia.

XJO fell heavily -0.98%. All 11 sectors were down.

XJO hit horizontal support from the low of 14 February. On that date, the XJO kicked up off its lows and led on to a tradable rally.

Yesterday, XJO kicked up off its lows after a very heavy fall of -2% to halve that fall and finish down -0.98%. So we might get a bounce here. It may not be, however, a medium term tradable rally as in February. Back then, XJO was above its 50-Day MA. Now the XJO is well below the 50-Day MA so any rally is likely to be sold into. Fortunes will probably depend on how the American reporting season goes - always an unknown factor.

Good luck.