Wall Street is set for a lower open as investors await first-quarter earnings season to begin, and then assess the damage the coronavirus may have had on corporate earnings. Analysts are expecting a 9% drop in earnings for S&P 500 firms after a forecast of a 6.3% increase, according to IBES data from Refinitiv. Over the weekend, major oil producers announced an output cut, the biggest-ever, but prices were little changed as the virus has lowered demand.
The S&P 500 rallied up to resistance at 2825.60 only to close at 2789.82 on Thursday. The move did come with better than average volume, and the RSI index continued to move higher, closing at 54.62. Potential resistance will continue to be at 2825.60 and then possibly at 2882.59. Possible support could come in at 2711.33. We feel another short basing for the index is needed before an attempt to take out any resistance levels. There are still plenty of sellers lurking at current levels, and that could make a continued up move difficult.
We are currently long-term bullish and short-term bullish.
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.
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