U.S. stock futures are lower to start the day after Johnson & Johnson (JNJ) paused its COVID-19 vaccine trials. An unexplained illness during the trial caused the stock to drop 1.2% in pre-market trading. JPMorgan (JPM) rose by 1.8%, and Citigroup (C) gained 2.4% after beating analysts’ estimates for Q3 profits. However, the street expectations are for a Q3 slide in earnings for S&P 500 companies of 20.7% from a year earlier.
The S&P 500 rallied for the fourth day in a row closing at 3534.22 after briefly testing the 3500 area. Again, the trading came with average volume of 2,240,696,832 and a rise in the RSI index, closing at 64.90. The index appears to be overbought and extended, and we believe a base between 3550 and 3500 might be needed before the rally can continue. If sellers should come in, possible support could come in at the 3499.61 level.
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.