Death Crosses for 2012 AAPL Apple COMPQ Nasdaq UTIL Utilities CRB Commodities Daily Charts

Merry Christmas.  On this joyous day, here is a look at the dark-side death crosses for 2012 where the 50-day MA stabs down thru the 200-day MA. The death cross verifies ongoing bearishness but overall is not that important of a technical indicator for the die-hard technical analysts. In fact, typically when the death cross occurs, there will be price buoyancy for a few weeks afterwards. The death crosses, and golden crosses (where the 50-day crosses up thru the 200-day to signal bullishness ahead), are more of a media event that provides journalists something to write about and wannabe technicians a flag to wave.  Nonetheless, the last few weeks show a few notable death crosses of interest.

AAPL failed a couple weeks ago. The mighty apple has fallen from the tree.  Since such a large portion of the Nasdaq consists of Apple, it is not surprising to see the Nasdaq capitulate with a death cross.  Tech leads the broad indexes so the breakdown of tech is important.  Small caps are also an important leader so watch the RUT to see if the death cross occurs in coming weeks, or not.  The utilities often go unnoticed since they are not as sexy as tech or other exciting stocks but they do forecast broad market direction and the death cross in UTIL is important.  Also of interest is the drift lower in the commodities sector, with CRB crossing back down into a death cross after recovering with a golden cross only three months ago.  The firm confirmation of a global economic slowdown is shown by a death cross in commodities and copper. Copper has been in a death cross for a few months attempting a recover but is now slipping away once again, its chart is very similar to commodities.  Dr. Copper leads the markets, especially since housing and automobiles are the two largest users of copper. If these two markets are rocking, the economy is running forward to great things, if copper is in retreat, an economic malaise continues.

The copper and commodity weakness hints that perhaps the auto and housing mini-recoveries in recent months may be an illusion. The housing sector will likely run out of wealthy folks that are building the new homes while the shadow housing inventory is exposed at the same time.  Hurricane Sandy should create a need for vehicles but overall, the global automobile picture is not rosie. European auto sales plummeted over the last month although the German manufacturers are running on all cylinders.

Of the four main indexes to watch, SPX, INDU, COMPQ and RUT, where the SPX and Dow Industrials are the broad market, COMPQ a gauge for tech, and RUT a gauge for the small caps, the death cross has only afflicted tech thus far.  Watch the other three in early 2013 to see if any further death crosses pound nails in the market coffin, or not. This information is for educational and entertainment purposes only. Do not invest based on anything you read or view here.  Consult your financial advisor before making any investment decision.