U.S. stock futures are lower as an increase in global COVID-19 cases has investors worried about economic growth. Virus cases continue to rise overseas as some developed nations struggle to contain infections. Also, U.S. markets appear to be extended, and some traders may be looking to lock in profits after the recent uptrend off the march low at 3723.34 on 3/4/2021.
The S&P 500 traded down to and held support at 4151.69 and closed lower at 4163.26. The RSI index did move out of the overbought zone closing at 69.66, but a move below 70 typically brings in more selling. We feel the index will potentially test support at 4120.87 before resuming the uptrend. That pullback would be constructive and possibly bring in the buy-the-dips investors. We will now be moving to a short-term cautious stance.
We are currently long-term bullish and short-term cautious.
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.
This is not a recommendation to buy or sell any company’s stock mentioned above.