Wall Street is set for a strong open this morning as S&P 500 futures were up over 5% in early morning trading. Hopes of a stimulus package to offset the economic impact of the coronavirus is being priced into the market. The U.S Federal Reserve injected $500 billion into the financial system, and they also pledged to add $1 trillion more. Central banks across the world are also acting to provide short-term liquidity, and so far, investors are approving of the stimulus actions.
The S&P 500 moved below support at 2822.12 and closed at 2480.64 on Thursday. Volume was massive on the day, and the RSI index also moved lower in support of the selling to close at 25.48. Possible support could not become the 12/28/2018 low of 2345.58, and we are hopeful buyers will step in at this level. We believe the index is now oversold, and a relief rally could possibly take place today as we close out the week. However, markets are still in uncharted territory, and we feel the preservation of principal is still the best strategy for now.
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.
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