Wall Street is set for another lower open after U.S. inflation grew at the fastest rate in 12 years. The Consumer Price index rose 4.2% year over year, and the monthly gain was 0.8%. Also, energy prices rose 25% year over year as the national average for gasoline hit $3 a gallon. However, inflation a year ago was at a historic low this time last year due to the U.S. economy being locked down. So, expectations for inflation by leading economist remains at 2% by the end of the year.
The S&P 500 traded in a wide range and moved below two support levels on Tuesday. However, buying did come in, and the index rallied to close flat at 4152.10. There was a pick-up in volume with 2,429,803,776 shares traded, and RSI continued to dive lower, closing at 52.01. We are now moving to a short-term cautious stance due to the probability of more selling being high. Potential support remains at 4128.59 and then 4068.31, and we feel those levels might be tested 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, RJFS
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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