S&P 500 Forecast – Stock Markets Looking for End of Month Markup

US Stock Market Forecast Video for 02.10.23

S&P 500 Technical Analysis

The S&P 500 has had a positive start to the Friday session, which should not be huge surprise considering that it’s the end of the month, and a lot of fund managers will step into the market and make changes, thereby causing the “end of the month markup” that we see almost every month. Having said that, it doesn’t necessarily mean that anything’s changed, but it’s probably worth noting that we have bounced from the 200-Day EMA, so from a technical analysis standpoint, it does make a certain amount of sense. Whether or not we can continue to go higher remains to be seen, but we would need to get above the top of the candlestick from Tuesday at the very least for me to get bullish. We may simply go sideways for a while, as we wait for Q3 earnings announcements.

Underneath, if we were to break down below the bottom of the Wednesday candlestick, that could open up a nether flood of selling orders, sending the S&P 500 down toward the 4200 level. That being said, it’s very likely that we continue to see short-term bullish behavior but whether or not it can actually stick remains to be seen.

Be cautious with your position sizing, and it’s likely that we could continue to see a lot of volatility. Ultimately, this is a situation where you are probably better off waiting to see what the market is going to do, because quite frankly chasing the trade right now probably doesn’t do you a lot of favors, especially as we will have to see whether or not interest rates calm down, or if they continue to climb. The higher interest rates go, the worse it is for stocks because you can simply put money into a T-bill or some type of bond in order to get a risk-free return instead of gambling in a very volatile marketplace. With this, I expect that the next couple of days should be very noisy and therefore you should trade accordingly, or just simply wait for a little bit more in the way of clarity.

For a look at all of today’s economic events, check out our economic calendar.