U.S. stock futures are higher despite new fears of a slowing economy and further pullbacks in the S&P 500. Concerns over high stock valuations and a slow vaccine rollout have investors cautious. Currently, stocks are trading at 22 times 12-month forward earnings, which is the most expensive since the late 1990s during the dot-com bubble. Meanwhile, the IHS Markits’ flash reading on Manufacturing is reported later today and is expected to show lower U.S. factory activity.
The S&P 500 traded down to 3885.03 and below support at 3892.59 but rallied to close at 3913.97. The index is now back in the middle of the recent trading range and the base that started on 2/9/2021. Volume was good with 2,002,668,544 shares traded, but the RSI index moved lower to close at 61.77. The reversal was impressive because support was broken for a second time, but the fact that buyers poured back in is a good sign that a possible new uptrend could start. We feel the buying could carry over into today and possibly help push the index back to the potential resistance 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.