US stocks kick off 2016 with heavy losses

By FXStreet FXStreet (Córdoba) – Wall Street started 2016 with a tough sell-off which resulted in a triple digit loss for the DJIA as a rout in China’s stock market triggered risk aversion.

The Dow lost 276 points or 1.58% and closed the day at 17,148.94. The Dow Jones Industrial Average traded over 400 points lower at one stage but recovered into the close. The S&P 500 fell 31.28 points, or 1.53%, to 2,012.66. The Nasdaq lost 104 points or 2.08% to 4,903.09.

DJIA technical perspective

“Nevertheless, the index presents a strong bearish tone in its daily chart, as it’s currently trading below its moving averages, whilst the technical indicators head sharply lower below their mid-lines”, said Valeria Bednarik, chief analyst at FXStreet. “In the 4 hours chart, the index is well below its moving averages, while the technical indicators are currently bouncing from extreme oversold levels, still far from confirming anything more than an upward corrective move for the upcoming hours. Should Chinese shares fall again this Tuesday, worldwide stocks will probably follow them later, with the US index poised to break below the 17,000 figure then”.

Support levels: 17,084 16,980 16,932. Resistance levels: 17,193 17,269 17,334.
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Source:: FX Street