U.S stock futures are down big this morning due to the continued tension between the U.S. and China. European markets were down, and Asian markets had their worst drop in 10 months. Fears of a prolonged trade war have investors worried at the start of a new week. The 10-year treasury yield moved down to 1.78% a three-year low as investors are seeking lower-risk assets.
The S&P 500 traded down below the 50-day moving average at 2972.56 and closed on Friday at 2932.05. The index bounced off support at 2912.99 and tried to rally but failed. The RSI index moved decisively below the 50 level, which supports the selling that has occurred. The next level of possible support now becomes 2874.68. As of 8:49 AM this morning the S&P 500 futures point to an open at 2877.10. So, if the support should break, more selling should come into the markets.
We are currently long term bullish and short cautious.
John N. Lilly III
Accredited Portfolio Management Advisor℠
Accredited Asset Management Specialist℠
Portfolio Manager, RJ
Dominguez & Jones Wealth Management Group
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.