The S&P futures are lower after a major hedge fund defaulted on margin calls. The news has created fears that U.S. lenders could also be in jeopardy of default on similar positions. Also, the news could have large institutions selling positions early to avoid potential losses in the future if the selling continues. The selling appears to have also hit U.S media stocks and Chinese tech companies.
The S&P 500 closed at a new all-time high of 3974.54 on Friday. However, the move came on tame volume of just 2,600,602,880, just slightly above average. The RSI index did move much higher in support of the move closing at 59.09. So, the index needs a follow-through day soon on heavy volume to proclaim a new uptrend. A pullback to potential support today at 3955.31 would be expected and possibly set up a move to a new all-time high soon.
We are currently long-term bullish and short-term cautious.
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.
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