S&P 500 Blasts Above Key Support Levels, Escapes Death Cross

(Bloomberg) -- A 7 percent rebound from last month’s lows has pushed the S&P 500 Index above both its 50-day and 200-day moving averages for the first time since early October.

S&P 500 Blasts Above Key Support Levels, Escapes Death Cross

The bounce-back was triggered last week by the Federal Reserve’s more dovish tone and gained momentum on growing optimism that the U.S. and China might resolve their trade war. The index jumped as much as 1.5 percent today after Presidents Donald Trump and Xi Jinping agreed to a 90-day tariff truce at the G-20 summit over the weekend.

It’s rare for the S&P 500 to trade below either its 50-day or 200-day moving average, let alone both of them. Prior to this year’s market gyrations, it hadn’t done so since mid-2016.

Chart watchers have also been keeping an eye on those levels as they moved toward another uncommon pattern. The 50-day moving average has been on the verge of breaking below the 200-day line. Known as a death cross, it’s a closely-watched signal of quick deterioration in short-term momentum that last appeared in the S&P 500 almost three years ago, in the midst of a 12 percent slump in the index.

The latest rally has put the S&P 500 back into the black for the year. But it remains about 5 below its Sept. 20 record closing level.

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