U.S. stock futures were lower on renewed fears that more lockdowns may be required soon, making an economic recovery less likely. Also, earnings season starts next week, and it is expected to be the worse for U.S. stocks since the 2008/2009 financial crisis. Another sign of possible economic weakness was the 10-year U.S. Treasury yield moving down to 0.58%. The all-time low was set back in March 2020 when the pandemic started to affect the U.S. economy.
The S&P 500 moved down and touched support at 3115.70, rallied up to resistance at 3181.49, and closed at 3152.05. Volume did pick up but was not enough to cause concern, and the RSI index turned lower to close at 56.48. Potential support will remain at 3115.70, and possible resistance could come in at 3155.53 and then 3181.49. The index is now in a tight trading range, and we will continue our short term stance bullish for now.
We are currently long-term bullish and short-term bullish.
John N. Lilly III CPFA
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.
Bond prices and yields are subject to change based on market conditions and availability. If bonds are sold prior to maturity, you may receive more or less than your initial investment. Holding bonds to term allows redemption at par value. There is an inverse relationship between interest rate movements and bond prices. Generally, when interest rates rise, bond prices fall and when interest rates fall, bond prices generally rise.U.S. Government Bonds and Treasury Bills are guaranteed by the government, and if held to maturity, offer a fixed rate of return and guaranteed principal value. The 10-year Treasury note is a debt obligation issued by the United States government with a maturity of 10 years upon initial issuance. The CBOE 10-Year Treasury Note (TNX) is based on 10 times the yield-to-maturity on the most recently auctioned 10-year Treasury note.