January 4, 2021, 12:51 pm EST
Intraday Reversal and Breakdown
Stock markets opened with a new high record high but it did not last very long. Markets quickly turned direction to the downside with all major indexes down more than -2% and DJIA -650 points.
Technically, it formed a bearish signal with both engulfing patterns and breakdown from the rising channel.
Particularly, there is no other significant news to drive the sell-off. Thus, it could indicate the fact that the top could be visible today’s intraday high.
This bull has been 12 years old with another fantastic performance last year (Nasdaq +43%). Thus, there should be no surprise that the end of the bulls is coming. We will need to follow up closely with both major indexes and leaders (AAPL, AMZN, FB, MSFT, GOOGL, TSLA) to determine if bulls are in big trouble. At this moment, scaling back a portfolio with fewer opening positions is a reasonable strategy.
