DAX Germany Daily Chart Death Cross

The DAX joins the Death Cross parade. In the United States, the SPX (S&P 500), INDU (Dow Industrials) and RUT (Russell 2000 small caps), and AAPL (Apple) are all in a death cross chart pattern. The 50-day MA stabs down through the 200-day MA creating the Death Cross. Moving averages are simply a smoothing mechanism which averages the stock price over the specified number of days. As mentioned by Keystone many times, seasoned technicians do not pay a lot of attention to the death cross but it is important and does guarantee weakness ahead--as long as the death cross remains.

Typically, when the death cross occurs, price will actually bounce since it has already been beaten down for many weeks to create the death cross in the first place. The DAX has been trying to stage a recovery rally in recent days. After the relief rally period which may last a few days or weeks, the stock or index will be lower 100% of the time, by definition, as long as the death cross remains.

It is comical to listen to pundits commenting on the death cross chart pattern. In troubling market times, everyone turns into a market technician. As is the case in life, those equipped with minimal knowledge become instant experts and espouse confusing and incorrect information. One pundit said the death cross forecasts a market crash.  The death cross chart pattern does not forecast a market crash. The DAX is bleak going forward and the German bulls can only save the day with a golden cross where the 50-day MA recovers back above the 200-day MA. If the death cross remains, the DAX is going far lower. 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.