U.S. stock futures are slightly higher ahead of Federal Reserve Chairman Jerome Powell’s testimony before Congress today. In his prepared remarks released on Monday afternoon, Powell said inflation has “increased notably in recent months, but he felt the recent rise is likely to fade. The Chairman is also expected to reiterate that inflation is transitory and will drop back as these transitory supply effects abate. As a result, he feels the inflation rate will fall back to 2% over the long term.
The S&P 500 rallied strongly on Monday, moving past the 50-day moving average and resistance at 4197.59. The volume was lower with only 2,036,837,888 shares traded, but RSI moved back above the middle line to close at 54.31. The index is now just below a potential resistance level at 4238.04, and we feel that it should hold today while the index consolidates the gains. However, Fed Chari Jerome Powell is testifying before Congress today, and his testimony has the potential to move the index in either direction quickly. His prepared statements appear, at this time, to be potentially bullish for today’s trading.
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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