(Bloomberg) — The Nasdaq Composite Index tumbled into an ominous “death cross” technical formation Friday for the first time since April 2020, when the pandemic battered the global economy and U.S. equity markets swooned.
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Following Friday’s 1.2% decline, the index has now shed 16% since touching a record high on Nov. 19. The pattern, which is used by some investors to assess longer-term trends, has at times presaged further weakness. It appears when an index’s short-term 50-day moving average crosses below its longer-term 200-day moving average.
The formation occurred in June 2000 when the dot-com bubble burst and again in January 2008 ahead of the global financial crisis.
“When you hear ‘death cross’ your antenna goes up,” Jay Woods, chief market strategist at DriveWealth Institutional, said in a phone interview. “It doesn’t always mean doom…
