S&P 500 forecast for the week of October 30, 2017, Technical Analysis

The S&P 500 initially fell during the week, testing the 2550 handle. We found enough support there to turn things around though, and by the end of the trading day on Friday, we had formed a massive hammer. This is quite outstanding and astonishing, as we have gone straight out for so long. I think at this point, you obviously cannot be a seller, but we are overbought by just about any metric you use. The earnings season was very good for the US, and of course the GDP was stronger than anticipated, so you can make the argument for upward pressure, but eventually, you must run out of buyers, or at least volume. I find it very difficult to go long of the market now, but I certainly cannot short it. I think that the 2500 level underneath should be massively supportive, and I think that the overall attitude of the market should continue to be seen.

S&P 500 Video 30.10.17

I believe that the market breaking below the 2500 level would be a warning, but I don’t think that we will see that happen in the short term. I think that eventually, the market will then go to the 2600 level, but I also anticipate that there will be a lot of noise. Quite frankly, I think it’s very difficult to buy-and-hold for a longer-term move because we have gone so far in such a short amount of time. We desperately need some type of pullback to offer value in the market, and until we get it I think it’s going to be almost impossible put a longer-term position to work. If you are a long-term trader, you probably give you must wait for value below, as this would be chasing the trade.