Wall Street is set to open higher a day after erasing all the 2020 gains for the year on Monday. The selling came in after reports of more coronavirus deaths raising fears of a pandemic, and the slowing of the global economy. In early trading, European shares opened higher but quickly moved lower down 0.3% to start the day. An inverted yield curve also caused concerns causing and raising the fears of a possible rescission this year.
The S&P 500 sold off below three support levels and finally found support at the 3214.68, which was the old low on 1/31/2020. The index closed at 3225.89, and the volume was well above average, signaling conviction for the move. Potential support will remain at 3214.68, and possible resistance will come in at 3268.44. Due to the massive volume, RSI moving lower, and break of support levels, we are moving to a short-term bearish stance.
We are currently long-term bullish and short-term bearish.
John N. Lilly III
Accredited Portfolio Management Advisor℠
Accredited Asset Management Specialist℠
Portfolio Manager, RJPartner, DJWMG
Dominguez & Jones Wealth Management Group
The Relative Strength Index (RSI), developed by J. Welles Wilder, is a momentum oscillator that measures the speed and changes of price movements.
The S&P 500 is an unmanaged index of 500 widely held stocks that is generally considered representative of the U.S stock market. Past performance may not be indicative of future results. Keep in mind that individuals cannot invest directly in any index, and index performance does not include transaction costs or other fees, which will affect actual investment performance. Individual investors’ results will vary. Opinions expressed are those of the author John N. Lilly III, and not necessarily those of Raymond James. “There is no guarantee that these statements, opinions or forecast provided herein will prove to be correct. “The information contained was received from sources believed to be reliable, but accuracy is not guaranteed. Investing always involves risk and you may incur a profit or loss. No investment strategy can guarantee success. The charts and/or tables presented herein are for illustrative purposes only and should not be considered as the sole basis for your investment decision. International investing involves special risks, including currency fluctuations, different financial accounting standards, and possible political and economic volatility. Investing in emerging markets can be riskier than investing in well-established foreign markets.
A yield curve is a line that plots yields (interest rates) of bonds having equal credit quality but differing maturity dates. The slope of the yield curve gives an idea of future interest rate changes and economic activity. There are three main types of yield curve shapes: normal (upward sloping curve), inverted (downward sloping curve) and flat.