'The Death Cross' has happened which Wall Street feared.

[Ichingcarpenter]

Death Cross

What Does Death Cross Mean?
A crossover resulting from a security's long-term moving average breaking above its short-term moving average or support level.






Read more: http://www.investopedia.com/terms/d/deathcross.asp#ixzz1VZah1i1a


(Reuters) - Before the stormy trading of August, many stock investors probably thought "death cross" was the name of some heavy metal band.
But after a period in which the S&P 500 plunged more than 15 percent, daily trading volumes spiked by 70 percent and the United States lost its vaunted 'triple-A' rating, a death cross and other technical analysis terms are something investors have had to become increasingly familiar with.

For chartists and market technicians, the death cross is a strong bearish signal that indicates a major shift in trading momentum.In the case of the S&P 500, a death cross occurs when the 50-day average for the index sinks below, or crosses over, its 200-day average. (Graphic: r.reuters.com/baq33s)

There was a time on Wall Street when many regarded technical analysis as something akin to voodoo economics, especially among stock pickers who specialized in fundamental research. But with algorithimic trading all the rage, it appears that cold and dispassionate technical market analysis is coming of age.

The recent market plunge which took the S&P 500 to about 1,100 is a prime of example of why more traders are looking to technical analysis for guidance. That's because many computer-driven trading programs are pegged to buy and sell stocks when certain market levels are breached.

"Computers fire off automatically; you don't have the time lag you'd have in normal decision making," says Marc Pado, U.S. technical market strategist at Cantor Fitzgerald & Co. "Clearly this is not stock picking (but) indiscriminate buying and selling."


snip......

http://www.reuters.com/article/2011/08/19/us-markets-volatility-technical-idUSTRE77I2SO20110819

[Oceansaway]

1. K&R..n/t

[Xipe Totec]

2. Self fulfilling prophecies

"That's because many computer-driven trading programs are pegged to buy and sell stocks when certain market levels are breached."

[ixion]

3. In all fairness, it's not really 'indiscriminate'

it is, in fact, discriminating, because there is an algorithm applied based on a set of predefined rules, rules which were set up by traders and/or analysts.

It is an automated process, but it is not indiscriminate.

[Kablooie]

4. I get the feeling that a historical collapse of modern civilization may be imminent.

The insanity seems to be picking up pace everywhere.

The stock market is losing it's mind.
World economies are collapsing everywhere.
The middle east is wildly overthrowing governments.
Insane-ites are swarming over American politics.
The super rich are getting super richer every day while all this is going on.

There's no foundation to support anything anymore.
Something big is toppling and no one knows how to stop it.

[MrMickeysMom]

5. Time to check in with the Keiser Report...

http://maxkeiser.com/tag/keiser-report/

All these algorithms and the dreaded death cross... are things falling apart in different countries for different reasons.... Larceny at the top?

"An assembly line of crime..." - Max Keiser

[Ichingcarpenter]

6. Watch the Feds next move

With QE1 and then QE2, the Fed has been massively inflating another asset bubble, namely the stock market. It was a desperate idea with high stakes.

Now, as the artificially inflated stock market falters, the Fed will probably, with heightened desperation, come back in and start buying more and more toxic assets off the balance sheets of wealthy people.

As the saying goes, “the wealthy like to privatize their gains but socialize their losses.” The Fed is their primary tool for accomplishing that.

[cilla4progress]

7. It would seem like time now is for

a big, bold move -- perhaps in the direction of socialism, in this country. BO's chances for re-election look like they are in the crapper anyway...rather than small insignificant adjustments, he (and the Dems) should go for broke, in the sense of truly pushing what they say the advocate, from single-payer, to de-militarization, to WPA-style jobs programs, to real investments in public, and higher education.

We know they can't get these all (or any) passed through Congress, but with the apocalyptic currents underrunning the national - and worldwide - sentiment, why not shake it up and shift the paradigm?