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A dead cross marks the downturn

An ominous market indicator has appeared that suggests the US and Europe may have seen the end of a brief late-summer rally

One of the strongest indicators that the recent market rally is set to end appeared this week when a 'dead cross' situation, which typically signals a plunge in equity prices, occurred on an index tracking the largest US companies .

For the first time in 14 months, the Dow Jones Golden Crossover US Large-Cap Total Stock Market Index's underlying data has signalled a dead cross situation. This occurs when the 50-day moving average sinks below the 200-day moving average on a selection of stocks.

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