U.S. stock futures were lower to start the day after more weak corporate earnings, and oil prices continued to plunge to record lows. A lack of storage capacity for oil has traders selling contracts that would deliver barrels of oil in May. The street also had more dismal earnings reports, more dividend cuts, and lowered financial outlooks for major companies. Also, an unconfirmed report on the potential dire health of North Korea’s Kim Jong Un rattled investors.
The S&P 500 sold off on Monday after failing to cross the 50-day moving average at 2852.64 for the second day and closed at 2823.16. The index also closed below support at 2825.60, which we feel will potentially bring in more sellers today. The RSI index also turned lower, but volume was below average, which was the one positive for the day. A move back into the old trading range of 2711.33-2825.60 would be constructive and would continue the base building we have wanted to see.
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
Futures trading is speculative, leveraged, and involves substantial risks. Investing always involves risk, including the loss of principal, and futures trading could present additional risk based on underlying commodities investments.
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.
This is not a recommendation to purchase or sell the stocks of the companies mentioned.