U.S. stocks are set to open higher on Tuesday after the S&P had its worst trading in four months. Global markets stabilized after the head of the World Health Organization said they are confident that China can contain the coronavirus outbreak. The Federal Reserve will begin its first meeting of the year and is expected to leave interest rates unchanged this month. Also, after the market close, Apple (AAPL) will report fourth-quarter earnings, and investors will be watching that report closely.
The S&P 500 sold off below support at 3260.86 and stopped at another support level at 3223.43. The index did bounce back to close at 3243.63 with better than average volume on the day. The selling caused the RSI index to dive lower below the 50 level to close at 47.17. So, the selling has relieved the overbought condition the RSI and the index had been in for weeks. At this point, we are now cautious, but we do feel this pullback can potentially be a new buying opportunity.
We are currently long-term bullish and short-term bullish.
John N. Lilly III
Accredited Portfolio Management Advisor℠
Accredited Asset Management Specialist℠
Portfolio Manager, RJ
Partner, Windsor Wealth
The Relative Strength Index (RSI), developed by J. Welles Wilder, is a momentum oscillator that measures the speed and changes of price movements.
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