So far price action today is showing a pretty heavy New Years hangover for investors with markets dropping steadily across the first half of the first trading day of 2021. What’s interesting is how much this looks like profit-taking in the wake of a spectacular second half last year. Obviously, there was a big bounce off the lows back in March, but even stripping out that initial bounce by looking just at the second half of the year, there’s a clear pattern in today’s trading for big winners leading the way lower. In the chart below, we show the average intraday performance of stocks in the Russell 3000, grouped by their performance last year. This broad index includes both large and small-cap stocks. As shown, by far the biggest losers today are the stocks that were the biggest gainers in the second half of last year.  Conversely, stocks that were at the bottom in terms of performance in the second half of last year are nearly unchanged so far today.   Investors accumulated a lot of gains in the second half of 2020, and based on today’s performance, it appears as though they were waiting for the calendar to turn before locking in some of those gains. Like what you see? Click here for a free trial to any of Bespoke’s premium membership options, including our nightly Closer note that regularly features decile analysis of this kind.

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