U.S. stock futures were lower after an unexpected rise in the jobless claims report this morning. Initial filings for unemployment insurance totaled 419,000 for the week ending July 17, well above the 350,000 estimates. Meanwhile, second-quarter earnings continue to come in better than expected, and so far, 88% of companies that have reported have beaten their earnings estimates, and 84% have beaten the revenue expectations.
The S&P 500 rallied again on Wednesday, closing higher at 4358.69 while moving through important resistance. The rally had decreasing volume, but we feel there is enough bullish momentum to move us back to a short-term bullish stance. Also, the Advance/Decline line broke a downtrend line, and RSI continues to higher in support of the two-day rally. Potential support could come in at 4329.38, and possible resistance is now at 4371.60. Today could be a slow day with flat trading which would be constructive for the continuation of the rally.
We are currently long-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.
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.
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