S&P 500 Price Forecast – 50-Day EMA Comes Into the Picture

US Stock Market Forecast Video for 26.05.23

S&P 500 Technical Analysis

The S&P 500 initially dipped during trading on Thursday, but turned around and saw 50-Day EMA has come into the picture. Ultimately, this is a market that looks as if it will probably try to go higher, looking near the 4200 level as a potential barrier. If you break above there, then it is very likely that the S&P 500 will eventually go looking to the 4300 level, which of course is an area that we had formed a swing high at previously. Short-term pullbacks continue to offer buying opportunities from everything I’ve seen, despite the fact that the S&P 500 might be divorced from economic reality at the moment.

After all, it’s all about Federal Reserve liquidity, and traders are still out there betting that the Fed will have to come in and liquefy everything as quickly as possible later this year, so it’s all about that narrative. Furthermore, you are starting to hear a common theme amongst earnings calls, which of course was “artificial intelligence.” In other words, it’s the latest narrative and therefore you are starting to see everybody try to use the market higher as far as CEOs are concerned. That being said, it really comes down to whether or not the Federal Reserve is going to be loosening anytime soon.

The market has been consolidating quite significantly just above the 50-Day EMA, and I think that probably continues to be the case at least in the short term. If we were to break down below the 50 day EMA, then I can make an argument for shorting, but even then, I think you probably have to be somewhat cautious, and you would struggle to get below the 4000 level unless of course something drastic happens. All things being equal, this is a market that I think continues to see a lot of noisy behavior, so you cannot get married to any one particular position and you will of course have to be very nimble. Furthermore, you have to pay close attention to the internals, because they may not be as strong as the index itself, as it is driven by just a handful of stocks.

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