Below are charts of the September S&P E-mini Future (ES_U) and S&P Equity Index. The death cross is underway, when the 50-day moving average crosses below the 200-day moving average. The S&P is trading below both moving averages so they act as resistance.
Some people think the death cross is backward looking or a BS event. It could already be priced in, but should be respected. It confirms the fact that shorter-term price action (50 days) is beating out longer-term price action (200 days), to the downside. Ultimately, the death cross could confirm a new bear market. But you know what I find interesting people?
IYR, the real estate ETF filled with large REITS, is still trading above its 200 day moving average while IYT (transporation stocks), ITB (housing construction), IWM (small caps) and DIA (industrials) all blew through that level a week ago. I'm curious to see if IYR fails miserably or succeeds. There could be an underlying meaning there, or well capitalized REITS follow the bond market if cash flows remain constant and yields fall. I found a Zacks Research article: Real Estate Investment Trust Outlook - July 2010.
Also, see my previous post on July 1 showing IYR vs. everyone else. So get ready for the MA battle tomorrow, crips = 50DMA blue line vs. bloods = 200DMA red line. The cross is actually right at the downtrend from the April peak. At some point the future will test the downtrend again (in my opinion) and perhaps the 1040-1045 ceiling level, depending on timing. The future as of 12:55am eastern is in the green, 1,014.75, +.50, +0.05%.
ESU10 - E-Mini S&P 500 2010 Future (OptionsXpress)
ESU10 - E-mini S&P 500 SEP (1-min hitting resistance) (OptionsXpress.com)