January’s weak end opening the way to a 10% market decline
The monthly candles close of the key US indices also look worrisome as the S&P500, Dow Jones and Nasdaq formed a “shooting star” pattern. We see the same reversal pattern on many other indices.
Today, as markets are trying to rebound from the local lows, it is worth observing to see if indices manage to return above the 50-day averages.
If they succeed, it would indicate buyers’ strength and an increased buying activity during the declines.
A pullback, however, looks more likely, potentially turning the former support into resistance. The 200-day average lines could become a technical target for a correction for the three major US indices.
For S&P500, this opens up the potential for a 10% decline from current levels, versus 8.2% for Dow Jones and 13.7% for Nasdaq100.
https://fxpro.news/daily-economic-events/januarys-weak-end-opening-the-way-to-a-10-market-decline-20210201/
