U.S. markets are set to open lower again today on the eve of Chinese Vice Premier Liu visit on Thursday. Investors are selling equities and moving to the safety of government bonds. Fears of China backing out of a trade deal continue to grow and will way heavily on markets the rest of the week.
The S&P 500 moved below two support levels on Tuesday and bounced off the critical support at 2860.30. The selling came on higher than average volume which shows the selling was intense. The RSI index moved below the 50 level which also indicates an index under distribution. The next potential level of support we will be watching is the 20-day moving average at 2856.60. If this level is broken, the selling could potentially increase and possibly drive the index much lower.
We are currently long term bullish with short term caution.
John N. Lilly III
Accredited Portfolio Management Advisor℠
Accredited Asset Management Specialist℠
Portfolio Manager, RJ
Partner, Windsor Wealth
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, onions 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.