U.S. markets are set to open lower once again on fears of the U.S.- China trade dispute. European markets were off half a percent, and Asian markets were off 1.8%. There is growing doubt that new U.S. tariffs can be avoided which is sending investors into safe-haven bonds. The Vice Premier of China will be in Washington today to try and hammer out a trade deal.
The S&P 500 sold off late in the day on Wednesday and is now at a support level of 2873.33. The 50-day moving average should now potentially be important support at 2858.46. Traders will be watching this level closely, and any break could bring in more selling on heavy volume. The RSI index is also moving lower and is now below the important 50 level. So, we will remain short cautious going forward.
The producer price index, PPI, increased 0.2% in April and year-over-year it now up 2.2%. Weekly jobless claims totaled 228,000 which was below the prior reading of 230,000. All signs that the U.S. still has a healthy economy.
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
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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