Not reliably. A death cross—the 50-day moving average crossing below the 200-day moving average—shows that recent prices have weakened relative to their longer-term trend. It does not establish that a stock or index will keep falling. Historical results vary by market, period, measurement and time horizon, and the signal can appear after much of a decline has already happened.
What a death cross tells you—and what it does not
In its conventional form, a death cross occurs when a security’s 50-day moving average falls below its 200-day moving average. Because both averages are calculated from past prices, the cross is a backward-looking description of price action: the shorter-term trend has weakened relative to the longer-term one.
That is different from a forecast. The cross alone cannot tell you whether prices will continue downward, rebound, or move sideways. Nor does it specify how large a future decline might be or when it might occur.
What historical studies have found
S&P 500: mixed outcomes, with a risk of late signals
Reuters reported in April 2025 that its analysis of LSEG data found the S&P 500’s death cross came after the index’s maximum intraday decline in 54% of cases in the roughly 50-year sample. The selloff worsened after the cross in 46% of cases; in those cases, the average further decline from the signal was 19%. These are results from that historical sample, not a timeless probability that a future cross will be followed by a decline. Reuters’ 2025 report also cites severe episodes associated with 1981, 2000 and 2007, when ultimate declines after the signal reached 21%, 45% and 55%, respectively. Those examples show what can happen, not what ordinarily happens.
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The same Reuters report relayed Bank of America technical strategist Paul Ciana’s analysis of nearly 100 years of data: the S&P 500 was down 52% of the time 20 trading days after a death cross, with an average return of −0.5%; after 30 trading days it was higher 60% of the time, with an average return of +0.8%. The change in results across these short horizons is a reminder that the answer depends partly on when you measure performance. These figures are attributed to Ciana through Reuters; they are not a separate review of his underlying note.
Drawdown during the signal: a different measure
Nasdaq Dorsey Wright measured S&P 500 drawdowns from the death-cross close to the lowest close before the 50-day average crossed back above the 200-day average. For 1929–2019, it reported an average drawdown of 12.57%, a median of 7.75% and a maximum of 78.84%. For 1950 onward, the corresponding figures were 10.37%, 5.38% and 53.44%; the maximum in that period occurred in 2008. These figures describe the worst point during a signal episode, not a fixed forward-return window or a strategy’s realized return. Nasdaq Dorsey Wright’s 2020 analysis also explains why a cross can lag: as older high prices leave the averages, the averages may continue falling even after a rebound has begun.
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Individual stocks: relative performance was close to chance in one study
A September 2026 Opulence Alpha Research study compared US stocks with death crosses against the median stock on the same date. It reported that death-cross stocks beat that median 49 times out of 100 over one month and 51 times out of 100 over three months. The comparison is benchmark-relative: a stock can decline in absolute terms yet outperform the median, or rise while underperforming it. The study says none of its eight tested horizons for death and golden crosses met its stated threshold for a proven relationship. Its results do not establish a universal forecast for every stock or market.
The study covered 1,763 of 1,767 US common stocks in its fixed universe across 1,634 Wednesdays from January 4, 1995, through August 19, 2026. It used adjusted closing prices for splits and dividends, counted crosses on the event Wednesday, did not add delisting returns, and disclosed survivorship bias in its outside-index stratum. Those design choices matter when interpreting its results. Read the study’s methodology and findings.
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Why studies can seem to disagree
“What happens after a death cross?” has no single answer unless the study specifies what it counted. A statistic about the S&P 500 cannot automatically be applied to an individual stock, and a worst-point drawdown during a signal episode is not interchangeable with a return 20 days later.
- Universe: An index and a collection of individual stocks are different samples. Whether delisted companies are included can affect stock-level results.
- Signal definition: Studies may count a daily closing cross or an intraday one, use simple or exponential averages, or treat every day below the longer average as a new observation.
- Outcome: A study might measure the chance of being down, an absolute return, performance versus a benchmark, or the maximum drawdown before the reverse cross.
- Horizon: The next session, 20 or 30 trading days, several months, and the full duration of a signal episode answer different questions.
- Period and market regime: Results change with the sample’s mix of bear markets, sideways periods and fast recoveries.
- Implementation: A historical price comparison may not account for dividends, transaction costs, slippage or whether a trade could be executed at the assumed price.
- Study design: Survivorship bias, overlapping observations, multiple testing and choices made after viewing results can affect how persuasive a backtest is.
A 2020 review by Reschenhofer emphasizes that moving-average strategy performance can vary with correction timing and transaction costs. CFA Institute’s 2022 discussion likewise addresses how volatility and skewness affect historical moving-average results. Such strategy analyses answer a different question from whether a stock printing a death cross tends to fall afterward. Reschenhofer’s 2020 review; CFA Institute’s 2022 discussion.
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Common mistakes when interpreting the signal
Calling confirmation a prediction
A cross confirms that the shorter average has weakened relative to the longer one. Since both use past prices, that condition may emerge only after substantial weakness. The Reuters and Nasdaq Dorsey Wright analyses illustrate why the date of the cross and the start of a decline are not necessarily the same.
Generalizing from famous crashes
Severe episodes after signals in 1981, 2000 and 2007 are memorable, but selecting those examples does not show how often the signal is followed by a decline. A fair assessment also counts rebounds, sideways markets and cases where losses did not deepen.
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Confusing an event study with a trading rule
Measuring an index’s drawdown until its moving averages cross back is not the same as testing a practical strategy. A strategy must define when an investor acts, what they hold while out of the market, when they re-enter, and how trading costs and execution affect results.
Ignoring whipsaws and the benchmark
In a choppy market, a trend-following rule can exit and re-enter repeatedly. And relative performance is not the same as absolute return: a stock can lose money while doing better than the median stock, or gain while doing worse. The answer therefore depends both on the market regime and on what outcome you care about.
How to use a death cross in context
Treat it as one description of trend conditions, not a standalone instruction to sell or short. Before relying on a chart signal, identify the security and average definition, the time horizon, and whether you care about absolute losses or performance versus a benchmark. Then compare evidence that uses the same definitions and outcome. Historical backtests cannot determine whether a trade suits your goals, risk tolerance or financial situation.
Adam Turnquist, LPL Financial’s chief technical strategist, told Reuters in 2025: “It’s a very ominous sounding signal in equity markets, but when you actually back-test the death cross throughout history, you’re better off a buyer than a seller on the death cross.” That is an analyst’s interpretation of historical results, not proof of a reliable signal or a recommendation for an individual investor.
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