"Many headlines might say that weak manufacturing data sparked today's sell-off, but in reality, the bears were in control in January, and continued to press things lower again," noted Schaeffer's Senior Technical Strategist Ryan Detrick, CMT. The Dow Jones Industrial Average (DJI) continued to widen its losses today, closing sharply lower and hitting its lowest point since mid-October. "The 1,775 level on the S&P 500 Index (SPX) had been viewed as support, but it's been broken in a big way. Don't be a hero here. Fear is ramping up, and this is a good sign. Still, all those levels of support that broke could now be resistance."
Continue reading for more on today's market, including:
The Dow Jones Industrial Average (DJI - 15,372.80) swallowed its seventh triple-digit decline of the year today, shedding 326.1 points, or 2.1%, to close at its lowest point since Oct. 17. Just one Dow component -- Pfizer Inc. (NYSE:PFE) -- managed to gain ground, up 0.7%. Pacing the 29 losers was AT&T Inc. (NYSE:T), which dropped 4.1%.
The S&P 500 Index (SPX - 1,741.89) endured a similar drubbing, off 40.7 points, or 2.3%. Meanwhile, the Nasdaq Composite (COMP - 3,996.96) shed 106.9 points, or 2.6%, to end south of the 4,000 level for the first time since Dec. 12.
The CBOE Volatility Index (VIX - 21.44) zoomed higher, adding 3 points, or 16.5%. It was the fear gauge's first close north of 20 since Oct. 8.
A Trader's Take:
"Emerging markets get lots of blame for the recent weakness, but we need to remember that Latin America has been in a bear market for three years now," Detrick noted. "So, are U.S. markets really down because of this now? I don't think so, but the action overseas is definitely creating some major volatility here. Elsewhere, Japan is officially in 'correction' mode, down 10% from its recent peak. This gets a lot of press, but the Japanese market has always been among the most volatile. Still, when one of the world's largest economies has a stock market that's correcting, it isn't going to help ongoing global jitters."
5 Items on Our Radar Today:
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