U.S. stock futures are substantially lower to start the week as the nation continued to have surging virus cases over the weekend. Also, of concern was weak economic reports last week that showed a slowing U.S. economy. Earnings season will kick off this week, and investors will want to see large corporations post strong earnings to continue the current uptrend.
The S&P 500 moved higher for the fourth day in a row and closed at another new all-time high of 3824.68. The volume was only average with 2,369,188,096 shares traded, and RSI moved into the overbought zone. We feel the next move will be lower due to an overbought and extended S&P 500. Also, the low volume during the four-day run-up is another concern. The selling should only be profit-taking after a tremendous start to the year. There will be potential support at 3783.04 and then possibly at 3723.03.
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.