The S&P 500 futures trade 71 points, or 1.6%, above fair value in a relief rally on news that Russia has pulled back some troops from its border with Ukraine. Long-term interest rates have edged higher while oil prices have taken a dip. According to CNBC, there are still over 100,000 troops conducting large military drills at the border, so the U.S. is taking possible de-escalation with a “grain of salt.” The market, though, is more optimistic that diplomacy will win out. Other positive-sounding developments include the People’s Bank of China injecting CNY100 billion ($15.7 billion) into the banking system, Intel (INTC 48.21, +0.63, +1.3%) acquiring Tower Semi (TSEM 47.73, +14.60, +44.1%) in a $5.4 billion cash deal, and better-than-expected earnings reports.
(Michael Gibbs, Director of Equity Portfolio & Technical Strategy)
The S&P 500 sold off again on Tuesday, closing lower at 4401.67. However, buyers did step in at 4364.84 and rallied the index into the close. So, we now know there is more potential support 4364.84 if the index should see selling today. So far, the S&P 5000 futures are higher by 56 points this morning, with a suggested open of 4447.75. That would bring about a test of the possible resistance at the 200-day moving average at 4453.16 early in the trading day.
We are currently Intermediate-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
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 advance/decline line (A/D) is a technical indicator that plots the difference between the number of advancing and declining stocks on a daily basis. The indicator is cumulative, with a positive number being added to the prior number, or if the number is negative it is subtracted from the prior number.
The A/D line is used to show market sentiment, as it tells traders whether there are more stocks rising or falling. It is used to confirm price trends in major indexes, and can also warn of reversals when divergence occurs.
Net New 52-Week Highs is a simple breadth indicator found by subtracting new lows from new highs. “New lows” is the number of stocks recording new 52-week lows. “New highs” is the number of stocks making new 52-week highs. This indicator provides an immediate score for internal strength or weakness in the market. There are more new highs when the indicator is positive, which favors the bulls. There are more new lows when the indicator is negative, which favors the bears. Chartists can analyze daily fluctuations or apply a moving average to create an oscillator that meanders above and below the zero line. Net New Highs can also be used like the AD Line by creating a High-Low Line based on cumulative Net New Highs.
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.
This is not a recommendation to buy or sell any company’s stock mentioned above.