Wall Street was set for a higher open on Thursday after losing 3% in the first two trading sessions of October. Today the Institute For Supply Management survey, ISM, is out at 10:00 a.m., and the reading is expected to show a continued slowdown in economic growth. Investors could remain cautious ahead of the important jobs number that is due Friday morning.
The S&P 500 moved closed at 2887.61 on Wednesday, which was below key support at 2891.85. The index traded as low as 2874.93 but rallied to end the day off by 1.8%. Volume was above average, and the RSI index moved lower to close at the 35.44. We believe the index is now extended and close to being in oversold territory. A move higher from here may be standard, but without a significant pick up in volume would be suspect at best. We are moving to short term bearish in our trading stance.
We are currently long term bullish and short term bearish.
John N. Lilly III
Accredited Portfolio Management Advisor℠
Accredited Asset Management Specialist℠
Portfolio Manager, RJ
Dominguez & Jones Wealth Management Group
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.
The Institute For Supply Management surveys more than 375 firms from numerous sectors across the United States for its non-manufacturing index. This index covers services, construction, mining, agriculture, forestry, and fishing and hunting. The non-manufacturing composite index has four equally weighted components: business activity (closely related to a production index), new orders, employment, and supplier deliveries (also known as vendor performance). The first three components are seasonally adjusted but the supplier deliveries index does not have statistically significant seasonality and is not adjusted. For the composite index, a reading above 50 percent indicates that the non-manufacturing economy is generally expanding; below 50 percent indicates that it is generally declining. The supplier deliveries component index requires extra explanation. A reading above 50 percent indicates slower deliveries and below 50 percent indicates faster deliveries. However, slower deliveries are a plus for the economy — indicating demand is up and vendors are not able to fill orders as quickly