U.S. markets are set to open lower, again, this morning after recording the worst week of trading since 2008. Earlier this morning, global markets openED up higher but later lost those gains mid-day. Investors are hoping for rate cuts around the world to offset the economic impact of the coronavirus. There are upcoming Federal Reserve and European Central Bank meetings, and they both look set to possibly cut rates in an effort to boost sentiment. As of this morning, Fed Funds futures are pricing in a 50 basis point cut by the Federal Reserve, and they could act mid-meeting if markets continue to tumble.
The S&P 500 traded down to old support at 2885.84 but rallied to end the week at 2954.22. Volume was once again above average, and RSI moved lower to support the selling. The rally off the support level was impressive but may not be enough to cause a rebound due to the technical damage done. The RSI index is oversold along with the market, so we will take a wait and see approach well maintaining our 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, 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.