Energy & Metals Begin 2016 in the Green as S&P 500 Tumbles
Resource investors should be encouraged by the first trading session of the new year. On a day in which the Dow Jones Industrial Average closed down nearly 300 points (down by more than 400 points at the session lows), precious metals mining and energy stocks were the strongest sectors:
S&P 500 Heat Map
Meanwhile last year’s leading sector (technology, specifically the “FANG” stocks) led the market lower.
The S&P 500 found support at the bottom end of a crucial band of support resistance (1990-2000) and bounced late in the session, printing a potential reversal ‘hammer’ candlestick in the process:
S&P 500 (Daily)
Today’s low in the S&P lines up perfectly with the downtrending channel which has formed since November. The 1990-2000 area also lines up with support dating back to last January and resistance from the August/September time frame. Today’s low (1990) now become an important reference point with the next upside potential resistance area coming in at 2035-2040.