U.S. stock futures are set to open higher today after President Trump said China wants to return to the negotiating table. Asian markets finished lower, but European markets reversed course to the plus side after the news. The 10-year U.S. Treasury bond yield hit a 3-year low at 1.44% early before rising back to a 1.51% yield.
The S&P 500 was down 2.7% on Friday on better than average volume to close at 2847.11. The index moved below a vital trend line going back to the June low of the year at 2728.81 on 6/3/2019. The RSI index also moved lower, and there was a big pick up in volume that was better than average. A move back above the trendline on good volume would be a good sign the selling is over. However, a move below 2822.12 could bring in more selling so we will remain short term cautious.
New orders for U.S. made capital goods unexpectedly rose in July, but shipments were lower by the most in three years. The data suggest that business investment is not growing due to the tension of the U.S.- China trade war.
We are currently long term bullish and short term cautious.
John N. Lilly III
Accredited Portfolio Management Advisor℠
Accredited Asset Management Specialist℠
Portfolio Manager, RJ
Partner, Windsor Wealth
The Relative Strength Index (RSI), developed by J. Welles Wilder, is a momentum oscillator that measures the speed and changes of price movements.
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