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What's Next? Stock Charts Ravaged, But Bottom Of SPX Range Holds For Now

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Salesforce.com Inc NYSE:CRM, Deere & Company NYSE:DE - What's Next? Stock Charts Ravaged, But Bottom Of SPX Range Holds For Now

The CBOE Volatility Index (VIX), the broader stock market's "fear gauge," is threatening the psychologically significant "20" reading. It was pushed there late Thursday as part of an all-out assault across the S&P 500's (SPX) 10 sectors.

That begs the big question: Was that our healthy back-to-school haircut? Or was it a reset that will force the bulls (and the Federal Reserve) to take a good look at the globe?

Stock sellers came up for air briefly overnight, lifting some bulls' hopes that Thursday's plunge—the deepest loss of the year so far—could be short-lived. But another Chinese red flag spoiled the bulls' night. Activity in the economic giant's factory sector fell to a 6 ½-year low in August.

China's Shanghai Composite closed down 4.3%. Europe's broad stock averages technically flirted with correction territory on Friday, on track to log their worst week of 2015. As global stocks recoiled, "defensive" gold was up some 4% early Friday. Oil prices fell but are holding just above $41 a barrel. But check this out: Oil is on track to log its 8th straight losing week, a streak last seen in 1986.

With Thursday's retreat, main U.S. stock indexes turned negative for the year. The S&P 500 (SPX), in figure 1, shed over 2% to close at 2,035. The move pushed SPX...


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