S&P 500 Price Forecast – 50 Day EMA Seems to Be Holding

The S&P 500 initially fell during the trading session on Thursday to reach down towards the 4025 level and touch the gap from the previous breakout. We have since recovered quite a bit, and it now looks as if we are trying to go even higher, as the 4100 level has been tested. Ultimately, a lot of the inflation fears seems to be based upon the latest CPI figures, but the Federal Reserve is going to keep liquidity flowing regardless. It is almost as if Wall Street forgot that the Federal Reserve has already made the statement, and there is not much here to change the longer-term outlook for inflation.

S&P 500 Video 14.05.21

Now that markets have calmed down a bit, it does suggest that we will probably continue to recover, and it is only a matter of time before we go looking towards the highs again. Remember, I never short these indices, but I will buy puts under the right circumstances. With that in mind, I am bullish longer term as well, because of the liquidity factor. The 4000 level should continue to act as a major floor the market, if for no other reason than the psychological importance of that big figure.

I do not necessarily think that it will be easy to break through the 4200 level right away, but it certainly looks as if we are going to try to find out whether or not it can happen again. I have no interest in shorting this market but if we were to break the 200 day EMA then I start to buy puts. We are miles away from that currently, so I am looking for short-term buying opportunities on signs of support as we got earlier in the day.

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