U.S. stock futures are higher and are set to continue the rally that started midday on Monday. President Trump is set to sign the fiscal stimulus bill today that could help the U.S. economy continue to improve. Overnight Asian indexes were higher, and trading in Europe was also positive despite the new coronavirus strain in the United Kingdom. Domestically, the U.S. economy grew at a record pace as the Commerce Department reported a 33.4% GDP growth rate in the third quarter. Consumer spending, which accounts for more than two-thirds of U.S. economic activity, helped the recovery from a record weak second quarter of a 31.4% contraction.
The S&P500 traded down to 3636.48, just above potential support at 3633.46, and rallied to close higher at 3694.92. The close was above resistance at 3682.73 and moved the index into the old trading range from last week. The trading came with above-average volume at 2,6444,079,104, and RSI closed lower at 60.44. The rally was impressive, and the index needs a follow-through day, high volume, and RSI to turn higher today to confirm the change in sentiment. We know now buyers are active at the 3633.46 support level, and 3712.39 could now become potential resistance.
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.