Wall Street bleeds out in risk-off environment, DJIA eyes 200-DMA

Due to the continued angst over global trade and unrest in Hong Kong, global stocks were giving back territories. For US benchmarks, the Dow Jones Industrial Average, DJIA, lost a hefty 391 points, or 1.5%, to 25,896.44. At the lowest point of the day, the blue-chip gauge was sinking by as many as 462.5 points to an intraday low at 25,824.94. Meanwhile, the S&P 500 index dropped 35.96 points, or 1.2%, to 2,882.70. Eleven of its sectors were closing in the red. The Nasdaq Composite Index fell 95.73 points to 7,863.41, down 1.2%.

Safe havens tell a story

Analysts at ANZ Bank explained that the US-China tensions, Hong Kong tensions, Brexit brinkmanship are all leading the risk-off play out there:

"Gold has risen from under USD1300 at the end of May to over USD1500 today. US 10-year Treasury yields have fallen nearly 60bp in the same period. The JPY/USD is up 4%. Bitcoin, the alternative safe haven for the brave – or those with limited options – is up 35%. The S&P 500 is still up 4.5% since late May despite a wobbly month. While the majority of punters are still on the dance floor or at least hovering on the edge of it nervously clutching their drink, a few are opting to grab their coat and head home."

DJIA levels

The daily doji candle on the charts is playing out. The DJIA index found support on the 200-DMA last Wednesday and bears are back on the trajectory towards another test of the level, currently coming in at 25575. On the upside, the 20-day and 50-day moving average are a target at 26600s.