According to a report by MarketWatch, the Dow Jones Industrial Average is increasingly approaching a bearish "death cross," a technical indicator that has both stock-market bears and nervous bulls on edge.

Strategist David Rosenberg, president of Rosenberg Research, expressed concern over the Dow's recent struggles, stating that it is now at serious risk of experiencing the bearish 'Death Cross.' This occurs when the 50-day moving average, seen as a short-term trend indicator, falls below the 200-day moving average, which represents the longer-term trend.

While some argue that death crosses can indicate buying opportunities during bull markets, as they have sometimes coincided with market bottoms, others believe it should only be considered a true death cross if the 200-day moving average is declining when the 50-day moving average crosses below it. Currently, the 200-day average is near 33,805, roughly the same level as at the beginning of October.

Market analysts emphasize the need for confirmation of technical patterns to send a signal, but the proximity of the 50-day moving average to the 200-day trend line (0.5% away after Friday's close) makes the situation worth watching, according to Rosenberg.

While the Dow showed a strong bounce of over 500 points, or 1.6%, on Monday, it is still down 1.6% for the month of October and has lost 0.6% year-to-date. The S&P 500 index...

The Dow's most recent death cross occurred on March 8, 2022, resulting in a 6.4% gain after a month and a 0.5% increase after a year, according to Dow Jones Market Data.

Since the year 2000, the Dow has experienced 19 death crosses, with the most significant impact being seen in the Jan. 3, 2008, instance when the blue-chip gauge fell by 30.8% over the subsequent 12 months. However, the death cross on March 23, 2020, was followed by a remarkable 74.4% rally over the next year.

Historically, the median one-month return for the Dow after a death cross has been a negative 1.1%, with the index rising only 47.8% of the time. However, over a 12-month period, the median return is 6.92%, with positive performance occurring 76.2% of the time.

As the Dow inches closer to the potential death cross, market participants are remaining cautious, closely monitoring the technical signals and their potential implications for the broader stock market.