Wall Street is set to open higher today after additional monetary measures were put in place to try and calm investor sentiment. Even more, policies are expected soon, including a $1 trillion package, which would include direct financial help for Americans. A Reuters poll of economist showed the global economy already in a recession, and coronavirus-related layoffs pushed weekly jobless claims to a 2 1/2 year high. Markets will also have to deal with “quadruple witching” that could add to the recent volatility.
The S&P 500 tested potential resistance at 2478.86 but did not breakthrough on Thursday. However, we now know sellers are at that level, which could cause problems before the index can move higher. Potential support is at 2280.52, and we feel the price level should hold if tested again today. The RSI index continues to make higher lows each time the S&P 500 makes a new low. So, we are hopeful that a potential show term low is now in place.
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.
New unemployment claims are compiled weekly to show the number of individuals who filed for unemployment insurance for the first time. An increasing (decreasing) trend suggests a deteriorating (improving) labor market. The four-week moving average of new claims smooths out weekly volatility.
Quadruple witching refers to a date on which stock index futures, stock index options, stock options, and single stock futures expire simultaneously. While stock options contracts and index options expire on the third Friday of every month, all four asset classes expire simultaneously on the third Friday of March, June, September, and December.