The Standard & Poor’s 500 Index capped its worst-ever four-day start to a year, while gold rallied with the yen as turmoil in China spread around the world and billionaire George Soros warned that a larger crisis may be brewing.

The U.S. equities benchmark ended the first four days of 2016 lower by 4.9 percent, while the Dow Jones Industrial Average has erased more than 900 points so far this year. A measure of global shares wrapped up a four-day slide of 5.2 percent, its worst start in records back to 1998. Selling in global equities began in China after the central bank weakened the yuan an eighth day. Crude settled at a 12-year low, and copper dipped below $2 for the first time since 2009. The yen reached a four-month high.

“China devaluing its currency sparks concern that the global growth engine is starting to slow and that creates a dump of any high-flying stocks or anything people perceive as risk,” said Yousef Abbasi, a market strategist at Jones Trading Institutional Services in New York. “When you start to worry about growth, you have crude oil down and it all ties together. It’s the new year and people are scratching their heads, they’re not quite ready to buy the dip.”

David Fuller's view

The time to panic – quietly so not to embarrass ourselves – is when everyone is bullish.  Alternatively, place trailing stops and when stopped out, try not to buy back too quickly.

When everyone is bearish, it is time to look beyond all the scary news, which will be at least partially discounted, and create a list of value shares which are oversold.  Nibble incrementally, at least until you see the upward dynamics which indicates that demand is returning.  The greater the fear, the closer the market is to a sustainable low.