U.S. stock futures are set to open higher despite President Trump calling off stimulus negotiations on Tuesday. The announcement was posted on Twitter, and the President promised a major stimulus bill if he wins the upcoming presidential election. Later in the day, President Trump encouraged Congress to pass a series of smaller stand-alone bills that would target airlines, small businesses, and give $1,200 to individuals. However, most investors were not anticipating a new stimulus bill passed before the election and factoring that into trading strategies.
The S&P 500 moved up to potential resistance at 3428.92 but sold off and closed at 3360.97. The selling took the index below the 50-day moving average at 3367.90 with above-average volume of 2,553,815,296. The RSI index moved lower but was able to stay above the important 50 level, which is a potentially bullish sign. The index is now just above a potential vertical trend line, and we feel that the possible resistance level will hold today. Any close back above the 50-day moving average would be a good sign buyer enthusiasm is back in the markets.
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.
This is not a recommendation to buy or sell any company’s stock mentioned above.