U.S. stock futures are lower this morning as investors fear that the economic downturn may last longer than expected. Also, initial claims for state unemployment benefits totaled a seasonally adjusted 2.981 million for the week ended May 9th. The report comes a day after Federal Reserve Chairman Powell warned of and “extended period” of weak growth and stagnant incomes. Investors will now be dealing with an economy that continues to struggle due to the coronavirus.
The S&P 500 moved below support at 2879.22 and closed at 2870.12 on Tuesday. Volume was only average, and the RSI index turned lower to close at 53.28. So, yesterday we believed the support level would hold, but the market did not like some pieces of the Senate testimony yesterday in Washington. If the S&P 500 can move back above 2879.22 and hold, we believe that a potential new uptrend will still be possible. Further potential support could now be at 2825.60 is the selling should continue today.
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
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.