U.S. stock futures are lower to start the week amid fears of new coronavirus-driven lockdowns and Congress’s failure to agree on a new stimulus bill. The United Kingdom announced the possibility of a second national lockdown overnight threatening a potential global economic recovery. The passing of U.S. Supreme Court Justice Ruth Bader Ginsburg has staled, for now, the potential of a new stimulus package to support the U.S. economy. Investors are seeking safe assets to start a potentially volatile week.
The S&P 500 sold off heavy on Friday to moving below the 50-day moving average at 3342.93 and closing at 3319.47. The selling came with massive volume of 3,995,430,400, and the RSI index also dove lower to close at 42.74. The breach of the 50-day moving average should bring in more sellers today. The next level of potential support could come at 3279.32 and then possibly at 3200.05. We feel there is a possibility that the 3200.05 level could be tested today, and we will remain short term bearish.
We are currently long-term bullish and short-term bearish.
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.