The Nasdaq Composite index may be in for trouble, but then again it may not.

The index has formed a “death cross” chart pattern, meaning its 50-day moving average has dropped below its 200-day moving average.
That can be a sign of trouble ahead for stocks. For example, the pattern arose in June 2000, soon after the stock-market plunge began, and it emerged in January 2008, before the financial crisis, Bloomberg reports.
But the death cross also can be a lagging indicator. It showed up in April 2020, after the Nasdaq hit its trough the previous month.

The Nasdaq already has slid 16% from its Nov. 19 closing high.
Since 1971, the index has hit a death cross 31 times, and in 77% of those cases, the index was higher six months afterward, according to Potomac Fund Management, as cited by Bloomberg.

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