The S&P 500 futures were down over 90 points after President Trump warned the coronavirus could result in 100,000-200,00 U.S. deaths. The President added the country should brace for a “very painful two weeks.” Investors were looking for a V-shaped recovery, but that does not appear to what the stock market is forecasting. Later today, the March ADP Employment Change Report is expected to show more job losses, and the ISM Manufacturing Index will also be reported.
The S&P 500 traded within the current trading range of 2500-2637.81 and closed at 2584.59 on Tuesday. Volume came in at 4.0 billion shares, and RSI moved sideways to close at 45.39. Potential support is currently at 2500 and then possibly at 2380.90, and we feel the 2500 level is critical that needs to hold. If not, more selling could possibly come back in the index, which could set up a test of the recent lows.
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
Windsor Wealth Planners & Strategist
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.
The national employment report from Automated Data Processing Inc. is computed from ADP records that represent approximately 400,000 U.S. business clients and approximately 23 million U.S. employees working in all private industrial sectors. ADP contracted with Moody’s Analytics to compute a monthly report that would ultimately help to predict monthly nonfarm payrolls from the Bureau of Labor Statistic’s employment situation. The ADP report only covers private (excluding government) payrolls
Based on monthly questionnaire surveys of selected companies, the Purchasing Managers’ Manufacturing Index (PMI) offers an advance indication on month-to-month activity in the private sector economy by tracking changes in variables such as production, new orders, stock levels, employment and prices across manufacturing industries. The final index for the current month is released roughly a week after the flash.