U.S. stock futures are lower to start the week after the S&P 500 fell 4% at one point last week. Investors appear to be leary of rising inflation and high stock valuations. Also, the Fed’s minutes will be released on Wednesday, giving more information on the potential for a rise in inflation. First-quarter earnings will wrap up this week, and so far, 86% of S&P 500 companies have posted positive earnings.
The S&P 500 rallied for the second day in a row and closed higher at 4173.85. Over the last two days, the volume has trended lower, with Friday’s trading coming in with only 1,895,455,232 shares traded. The RSI index did move higher, moving through the middle line to close at 54.46. We feel the market requires rest, and there could be some selling today. However, that would be normal and constructive after two wide-ranging days. A small base at these levels could set up another rally soon. Potential resistance could come in at 4191.31, and possible support could come in at 4128.59.
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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