Is a Death Cross Looming for SPLG? Here's What the Chart (and the Economy) Are Telling Us
The technical clouds are gathering over SPLG.
A new **Death Cross** — when the 50-day moving average crosses below the 200-day moving average — appears imminent on the daily chart of SPLG, a popular low-cost S&P 500 ETF. This ominous signal historically marks bearish sentiment and trend reversals, especially when coupled with macro headwinds.
Let’s unpack what’s on the horizon, and why this technical setup deserves attention.
What the Chart Says
- The **last Death Cross** on SPLG occurred in early 2022, followed by months of weakness.
- A **Golden Cross** in mid-2023 launched a strong rally, fueled by soft-landing optimism and strong tech earnings.
- Now, the **moving averages are converging again**, with price slicing through both SMAs.
Volume has picked up, and momentum oscillators are struggling to regain bullish footing. The Stochastic is indecisive, and CM_Williams_Vix_Fix shows recent spikes — a sign that fear is creeping back into the market.
🏦 Recent Economic Data: Warning Signs?
The macro backdrop is not helping. Here’s why:
- **CPI and PPI came in hotter than expected** for March, pushing back the market’s timeline for rate cuts.
- **Retail sales surprised to the upside**, suggesting the consumer is still resilient — but that could also mean more inflationary pressure.
- The **labor market remains tight**, with unemployment below 4%, limiting the Fed’s flexibility.
Bottom line: the Fed is stuck. Markets that had priced in multiple rate cuts are now bracing for **"higher for longer"** — a toxic cocktail for growth-sensitive equities like those in SPLG.
Global Trade Tensions Resurface
As if inflation and rates weren’t enough, the White House just slapped **new tariffs on Chinese electric vehicles, solar panels, and batteries**, reigniting trade war fears.
This could:
- Increase input costs for U.S. manufacturers
- Add further upward pressure to inflation
- Trigger retaliation from China
Historically, rising tariffs have had a chilling effect on global equity markets, particularly large-cap exporters that dominate the S&P 500.
So, What’s the Play?
With technical signals flashing red and macro conditions deteriorating, it might be time to:
1. **Reduce exposure** to large-cap ETFs like SPLG until the Death Cross plays out
2. **Rotate into defensive sectors** (think utilities, consumer staples, and healthcare)
3. **Consider short-term hedges** if you're fully allocated
4. **Watch key levels** – a break below MXN$1,200 in SPLG could open the door to a deeper correction
Final Word
This isn’t a panic call — it’s a call for preparation.
Death Crosses don’t always lead to crashes, but when they align with fundamental deterioration and rising geopolitical risks, they can signal a trend change worth respecting.
Let the chart be your map, but keep one eye on the macro compass.
Stay sharp, trade smart.
The technical clouds are gathering over SPLG.
A new **Death Cross** — when the 50-day moving average crosses below the 200-day moving average — appears imminent on the daily chart of SPLG, a popular low-cost S&P 500 ETF. This ominous signal historically marks bearish sentiment and trend reversals, especially when coupled with macro headwinds.
Let’s unpack what’s on the horizon, and why this technical setup deserves attention.
What the Chart Says
- The **last Death Cross** on SPLG occurred in early 2022, followed by months of weakness.
- A **Golden Cross** in mid-2023 launched a strong rally, fueled by soft-landing optimism and strong tech earnings.
- Now, the **moving averages are converging again**, with price slicing through both SMAs.
Volume has picked up, and momentum oscillators are struggling to regain bullish footing. The Stochastic is indecisive, and CM_Williams_Vix_Fix shows recent spikes — a sign that fear is creeping back into the market.
🏦 Recent Economic Data: Warning Signs?
The macro backdrop is not helping. Here’s why:
- **CPI and PPI came in hotter than expected** for March, pushing back the market’s timeline for rate cuts.
- **Retail sales surprised to the upside**, suggesting the consumer is still resilient — but that could also mean more inflationary pressure.
- The **labor market remains tight**, with unemployment below 4%, limiting the Fed’s flexibility.
Bottom line: the Fed is stuck. Markets that had priced in multiple rate cuts are now bracing for **"higher for longer"** — a toxic cocktail for growth-sensitive equities like those in SPLG.
Global Trade Tensions Resurface
As if inflation and rates weren’t enough, the White House just slapped **new tariffs on Chinese electric vehicles, solar panels, and batteries**, reigniting trade war fears.
This could:
- Increase input costs for U.S. manufacturers
- Add further upward pressure to inflation
- Trigger retaliation from China
Historically, rising tariffs have had a chilling effect on global equity markets, particularly large-cap exporters that dominate the S&P 500.
So, What’s the Play?
With technical signals flashing red and macro conditions deteriorating, it might be time to:
1. **Reduce exposure** to large-cap ETFs like SPLG until the Death Cross plays out
2. **Rotate into defensive sectors** (think utilities, consumer staples, and healthcare)
3. **Consider short-term hedges** if you're fully allocated
4. **Watch key levels** – a break below MXN$1,200 in SPLG could open the door to a deeper correction
Final Word
This isn’t a panic call — it’s a call for preparation.
Death Crosses don’t always lead to crashes, but when they align with fundamental deterioration and rising geopolitical risks, they can signal a trend change worth respecting.
Let the chart be your map, but keep one eye on the macro compass.
Stay sharp, trade smart.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.