Wall Street is set to open lower as global stimulus action failed to calm fears that the coronavirus epidemic will cause a recession this year. Last night, the Federal Reserve increased its support for the flow of credit into the U.S. economy by creating a Money Market Fund Liquidity Facility (MMLF). The European Central Bank and the Bank of Japan both announced emergency bond-buying programs. Also, a Trump $1 trillion stimulus plan, if passed, could restore some confidence to world markets.
The S&P 500 traded below critical support at the 12/28/2018 low of 2346.59, but the index rallied later in the day to close at 2398.10. The break of the support level is worrisome, and a close below 2346.59 could potentially bring in more selling to an already uncertain market. The RSI index closed lower at 33.36, with volume was once again massive. A close above potential resistance at 2478.86 would be helpful and possibly bring some confidence back for investors. Until then, we remain short term bearish.
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.