U.S. stock futures are lower as investors appear to be taking profits after the recent rally in the S&P 500. One catalyst for the rally has been corporate earnings, with 82% of 355 S&P firms topping estimates for the fourth quarter. Meanwhile, recent Reuters polls showed the U.S. economy is expected to reach pre-COVID-19 levels within a year. This comes after data showed a large drop in the number of new virus cases and hospitalizations in the United States.
The S&P 500 traded in another broad-ranging day and again tested and held support at 3892.59. The volume was extremely light, with only 1,985,404,288 shares traded. The index is now forming a textbook base that will potentially lead to another new closing high soon. The RSI index is also moving sideways and forming a base confirming the trading action on the S&P 500. Potential support will remain at 3892.59, and possible resistance could come in at 3931.50.
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.