Death Cross: Not A Good Day For The So-Called "Risk" Trade
Follow The Money:
One of our most important roles in developing sound investment themes is to follow the flow of capital around the globe. We first turned bearish on dollar denominated assets in the first week of May when the euro, sp500, crude oil, copper and a slew of other dollar denominated assets violated key technical levels. After a brief rally in the first two weeks of June, it now appears the downward bias has returned.
Technical Damage- Death Cross:
A death cross is an important technical indicator that occurs when, A short term moving average (i.e. 50 DMA) undercuts its longer term moving average (i.e. 200 DMA line). Normally, a death cross has overtly bearish ramifications and suggests lower prices will follow. That said, the fact that the 50 DMA line already undercut the 200 DMA line in Copper, Crude Oil and the NYSE composite bodes poorly for the ongoing economic recovery:
Copper - Death Cross 50 DMA line undercuts 200 DMA line
Crude Oil- Death cross- 50 DMA line undercut its 200 DMA line