U.S. stock markets were lower on Monday as investors await news on U.S.-China trade talks later this week. Any good news could potentially send prices higher and vice versa on bad news. Interest rates are also back in the news as there is now a 76% chance of a 25-basis point cut by the Federal Reserve later this month. Also, third-quarter earnings will start soon, and they too could be market movers if the trade war has affected corporate profits.
The S&P 500 rallied for the second day in a row on Friday to close at 2952.0. The close was above resistance at 2945.50 and above the 50-day moving average at 2942.36. The RSI index also moved higher to confirm the rally and is close to moving above the 50 level. The one problem was again the volume, which was below average, so we are still cautious until heavy buying comes in with heavy volume. The index now has potential support at 2921.86, and we feel that level should hold this week.
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 Relative Strength Index (RSI), developed by J. Welles Wilder, is a momentum oscillator that measures the speed and changes of price movements.
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