Wall Street is set for a significant drop at the open of today’s trading as the sell-off in large tech companies continues. Also, the tightening of gasoline supplies in parts of the U.S. has investors in a bearish mood. The Colonial pipeline is still shut down, which is causing a spike in gas prices in the Southeast. A possible rise in interest rates and inflation could halt economic growth is another fear weighing on markets and could affect trading today. The yield on the 10-year Treasury moved higher to 1.64%, adding to the inflation spike fears.
The S&P 500 sold off last in the day after moving above resistance at 4218.78 and closed lower at 4188.43. The index is now just above potential support, and we feel there will now be more downside. There was a pick-up in volume with 2,313,680,128 shares traded, and RSI moved lower in support of the selling closing at 57.86. We feel that the potential support at 4128.59 will be tested and possibly broken today. A sell-off in major technology stocks along with the recent gas shortage has once again been proven to be a significant market disrupter. Also, the fact that we have gone from a new uptrend to a possible new downtrend shows how economic events can change market dynamics quickly.
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, RJFS
Windsor Wealth Planners & Strategist
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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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