U.S. stock futures are set to open lower again today after an increase in reported coronavirus cases overnight. The S&P 500 has recorded the fastest correction in history, and the index has moved 10% lower after a record close on 2/19/2020. Investors appear to be worried about a pandemic and a possible recession brought on by the outbreak of the virus. An inverted yield curve has also added these fears as major U.S. indices are set to post the worst week since 2008.
The S&P 500 moved below support at 3070.33, the 200-day moving average at 3046.57, and closed at 2978.76 on massive volume. The RSI index is now in the extreme oversold levels at 20.15 in support of the recent selloff. New potential support could soon be at 2963.07, and possible critical support could come in at 2855.94. We will remain short term bearish until buying comes in with an equal amount of buying as we have seen with the selling. Also, we feel investors may want to go into the weekend with cash for protection that could exacerbate the selloff today.
We are currently long-term bullish and short-term bearish.
John N. Lilly III
Accredited Portfolio Management Advisor℠
Accredited Asset Management Specialist℠
Portfolio Manager, RJ
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.