Wall Street closes sharply lower despite Veterans Day holiday

Technology leads losses, weighs on Nasdaq.
Crude oil prices fail to snap losing streak, drags energy lower.
CBOE Volatility Index rises nearly 20%.

Eren Sengezer FXStreet

Although markets were expected to stay calm on Veterans day, major equity indexes started the day in the red extended their slide to end the day sharply lower. Reflecting the risk-off mood, the CBOE Volatility Index, Wall Street's fear gauge, rose nearly 20% on the day.

With several of Apple's part suppliers cutting their forecasts, Apple shares came under a heavy selling pressure on Monday and dragged the S&P 500 Technology and Communication Services indexes lower, which finished the day 3.54% and 1.48% lower. The tech-heavy Nasdaq Composite Index erased around 3% to 6,830.14 points in accordance. Commenting on this development, "Apple suppliers have had some problems. It could be that worldwide demand (for the iPhone) cools off," J.J. Kinahan, chief market strategist at TD Ameritrade in Chicago, told Reuters.

In the meantime, after staging a modest recovery earlier in the day on hopes of OPEC+ introducing additional output cuts in 2019, crude oil prices slipped in the second half of the day as President Trump voiced his opposition to supply reduction in a tweet and the barrel of WTI broke below the $60 mark to force the S&P 500 ENergy Index to lose 2.15% on the day.

The Dow Jones Industrial Average dropped 602.12 points, or 2.32%, to 25,387.18, the S&P 500 fell 54.79 points, or 1.97%, to 2,726.22 on Monday.

DJIA technical outlook by FXStreet Chief Analyst Valeria Bednarik

The DJIA heads into the Asian opening trading at levels last seen a week ago, and with the daily chart showing an increasing downward potential, as despite holding above a directionless 20 SMA, technical indicators have turned sharply lower, the Momentum still above its 100 level but the RSI currently at 47.

The 4 hours chart shows that, after breaking below the 20 SMA last week, it has also broken below the 200 SMA, now barely holding above a directionless 100 SMA at 25,310. Technical indicators in the mentioned chart are at fresh November lows, with the RSI nearing oversold readings with a firm bearish slope, supporting a downward extension particularly on a break below the mentioned dynamic support.

Support levels: 25,362 - 25,310 - 25,248.

Resistance levels: 25,435 - 24,490 - 24,551.

Author

Eren Sengezer

FXStreet

As an economist at heart, Eren Sengezer specializes in the assessment of the short-term and long-term impacts of macroeconomic data, central bank policies and political developments on financial assets.

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