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Technical Analysis 101: Death Cross vs. Golden Cross

Kathy Lien
May 9, 2025
Have you ever come across the term death cross in trading? It sounds dramatic—and it is—but not always in the way you might think. Despite the ominous name, this technical chart pattern isn’t always a sign of doom. And its counterpart, the golden cross, might sound like a golden opportunity, but it can be just as misleading. Let’s break down what these patterns actually mean and why traders watch them so closely—especially when it comes to the S&P 500.
What Is a Death Cross?
A death cross occurs when a shorter-term moving average—typically the 50-day—crosses below a longer-term one, like the 200-day. It’s a visual cue that momentum is weakening. Many traders interpret this as a bearish signal, a sign that the market may be heading into a downtrend.

What it really shows is that recent price action has been consistently underperforming long-term trends. But here’s where things get interesting: despite the name, a death cross doesn’t always precede a crash. In fact, historical data shows that markets—particularly the S&P 500 and Nasdaq—often experience a short-term rebound after the pattern appears. One well-known example saw the S&P mark a near-term bottom just after a death cross formed.
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What About the Golden Cross?
On the flip side, a golden cross is when the 50-day moving average climbs above the 200-day moving average. It’s often seen as a bullish signal—momentum is gaining, and traders may see it as a sign of an upcoming rally.

The golden cross can indicate growing optimism and improving sentiment. But just like the death cross, it isn’t foolproof. Sometimes, a golden cross appears just as a rally is running out of steam. That’s why it’s important not to rely on these patterns alone. A golden cross might look bullish on the surface, but in some cases, it can signal exhaustion, not strength.

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How to Use Them Effectively
Both crosses can be powerful tools—but they work best in context. Smart traders combine them with other techniques: support and resistance zones, volume analysis, trendlines, even macroeconomic data. No pattern should ever stand alone.
A Unique Way to Trade the S&P

The death cross and golden cross are among the most watched chart signals for the S&P 500, making them especially relevant for traders looking to capture moves in major indices. Whether you're swing trading or looking for key trend shifts, patterns like these can offer great timing cues—when used correctly.

With platforms like Axi Select, traders can use strategies like these to trade the S&P with real funding and no upfront evaluation fees. It’s one of the more interesting—and visually intuitive—ways to identify trend changes and make smarter, more confident trades.

So, the next time you see a cross forming on your chart, remember: it's not about fear or excitement—it’s about reading the market with clarity.

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