Buy now? Odds favor rebound next week

Traders work on the floor of the New York Stock Exchange.
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Traders work on the floor of the New York Stock Exchange.

U.S. stocks sold off across the board in the first trading week of 2016, dragged down by concerns over the potential repercussions from a collapse in China's stock market.

Among the major U.S. indexes, the small-cap Russell 2000, Dow transports and Nasdaq got hit the hardest, falling at least 7 percent in the past five days. Other benchmarks like the Dow and S&P 500 were down about 6 percent for the week.

The drop in the S&P 500 this week translates to nearly $1.1 trillion in market-cap losses.

"It's been a panic-selling-type week and the U.S. markets have opened down more than 1.5 percent below the previous close in three of the last four days," wrote Roberto Friedlander, head of energy trading at Brean Capital, in reference to the overnight sell-offs in China.

Already this week, China's Shanghai composite plunged 10 percent while other major indexes like Germany's DAX and Japan's Nikkei 225 are down 8 percent and 7 percent, respectively.

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Given what traders call "extreme oversold levels," market watchers like Friedlander predict a relief rally for the S&P 500 in the days ahead.

And the stats back that up ... see below.

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