U.S. stock futures are lower to start the week after the U.S. blamed China for the spread of the Coronavirus. Secretary of State Mike Pompeo said there was ” a significant amount of evidence” that the virus emerged from a Chinese laboratory. The comment had investors fearful of another trade war disruption for the U.S. economy. Also, more than half of S&P 500 companies have reported earnings, and analysts now see Q1 earnings falling 12.7% from a year ago.
The S&P 500 moved below support at 2879.22 and closed at the week at 2830.71. The selling came on average volume, and RSI moved lower to close at 52.53. The index is now just above another potential support level at 2825.60, with the 50-day moving average at 2758.20 to also provide possible support. We continue to believe that dip buyer will, potentially, show up again in U.S. markets soon.
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.