Wall Street is set to open lower today as fears rise that the continued spread of the COVID-19 variant will slow the U.S. economy’s growth. The FOMC meeting notes released on Wednesday showed the Fed feels the U.S recovery has a long way to go. However, Atlanta Fed President Raphael Bostic warned that a spike in the virus could hamper the economic recovery. Also, the 10-year yield fell by another four basis points to 1.28% and is another sign investors are now in a risk-off mood.
The S&P 500 closed at yet another all-time new high at 4358.13 on Wednesday. The RSI index moved back into the overbought territory after closing at 71.19. This morning, the S&P 500 is down 1.29% in pre-market trading and is set to open under the support level at 4300.73. The next potential support level could then possibly come in at 4274.67. There is also possible support at the Fibonacci 50% retracement level at 4262.93, and we feel the index will hold above this level for today. If the selling becomes intense, there is a possible strong support level at 4257.16. We are moving to a short-term bearish stance 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
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The Relative Strength Index (RSI), developed by J. Welles Wilder, is a momentum oscillator that measures the speed and changes of price movements.
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