U.S. stock futures are sharply higher to start the week as investors appear to buy after last week’s selloff. Also, inflation expectations seem to be muted, and investors are beginning to respect the Fed’s stance that inflation is transitory. This morning, St. Louis Fed President Jeremy Bullard and Dallas Fed President Robert Kaplan will be giving speeches. Later in the day, New York President John Williams will also be speaking, and there could be new guidance on future Fed monetary policy.
The S&P 500 moved below support at 4197.59 and then below the 50-day moving average to close at 4166.45 on Friday. The trading came with massive volume with 3,608,016,384 shares traded, and RSI dove below the mid-line closing at 43.37. The break of the 50-day moving average on the increase in volume has moved us to a short-term bearish stance. The next potential support level could now be at 4118.38. A close back above the 50-day moving average at 4181.59 would be constructive, but we don’t see that happening today.
We are currently long-term bullish and short-term bearish.
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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