A quick note here, highlighting the bearish reversal we have seen in a number of US indices.
Earlier, the major indices were sharply higher, registering gains of around 1% each. But in the last couple of hours those gains have evaporated with technology leading the declines.
There was no data to trigger the move, but with growth concerns continuing to rise around the world, and the big interest rate rises that we have seen as central banks try to tame inflation, there is little wonder why the bulls are not so keen to trust this rally.
Granted, it is early days, but if we are still in a bear market trend, then we should ignore these signals at our peril.
The Nasdaq 100 has turned red on the day after failing to hold the breakout above its bearish trend line. Incidentally, the 38.2% Fibonacci level is also an additional technical factor that is aiding the bearish case.
Key short-term support comes in around 12900, a resistance-turned-support level.
For as long as the index holds above here, I don’t think the bulls would be too concerned. But if we start to see the index go back below this level, that’s when things would get interesting.
For now, today’s price action is a potential bearish signal about the trend direction. More price action is needed to confirm whether this is something more serious than just long-side profit-taking.
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