The Death Cross Foretold Everything

Markets are tanking today, and traders have various theories about why.

But here's one thing that technical analysts and other fans of chart-reading will be interested in.

Just a few days ago, the Russell 2000 (an index of small-cap stocks) made a "death cross."

That's when the 50-day moving average (the average of the last 50 days of the index) fell below the 200-day moving average (the slower-moving average of the last 200 days of the index).

Here's what it looked like.

For purists, the definition of "death cross" is defined by Stockopedia as: "On a stock chart, the Death cross occurs when the 50-day MA falls below the 200-day MA. As the name implies, a Death Cross is associated with sharp downward price"

Of course, there are other fundamental explanations for the selloff, including the recent rise in short-term interest rates.

And Dave Lutz of JonesTrading cited these things that traders are talking about:

• The S&P 500 broke below its 50-day moving average, and there is chatter about a large "institutional player" exiting positions in nearly 200 different stocks.
• Growth concerns are taking copper, silver, oil, and bond yields lower.
• There is "major hedging" in futures contracts due after a large broker was a sold a block of HYG, the ETF that tracks high-yield bonds.
• "Chatter of a big fixed income sell program."
• Yen is climbing due to concerns over Japan's Government Investment Pension Fund.
• Rumors that a hedge fund is in trouble, with media companies SFX Entertainment, Media General, Nexstar Broadcasting, and Gray Television falling.
• Terror concerns.
• A breakdown in commodities.