S&P 500 Price Forecast – ADP Numbers Shock the Stock Market

US Stock Market Forecast Video for 07.07.23

S&P 500 Technical Analysis

The S&P 500 has found itself to be struggling a bit during the trading session on Thursday, as the ADP employment numbers came out twice what they were expected, and traders are worried now that perhaps the Federal Reserve will have to continue with an ultra tight monetary policy, thereby crushing risk appetite. Whether or not that’s actually the case remains to be seen, and it’s probably worth noting that the ADP is notoriously noisy, so therefore by the time the Non-Farm Payroll numbers come out on Friday, we could be looking at a completely different situation.

With that in mind, I would take this candle with somewhat of a grain of salt, and it does make a certain amount of sense that there would be profit-taking heading into the jobs number, because it can be so dangerous to trade through. With that, I like the idea of buying some type of dip after recovery, and it also makes sense that the 4500 level in the futures market has caused a bit of a headache. With that being the case, I think we’ve got a situation where the market will present itself value eventually, and I do think the traders will take advantage of it if and when they get that opportunity.

I suspect that the 4400 level will be the first potential area of support, followed by the 4300 level, an area that also features quite a bit of structural support. Nonetheless, I do think that it will be very noisy, so you will have to be very cautious with your position sizing. Eventually, the market will have to make up its longer-term direction decision, but right now it looks like we are simply taking a little bit of risk off the table, and again, as the jobs number tends to be so volatile, that does make a certain amount of sense regardless. With that being the case, I am more than willing to simply wait for some type of bounce to take advantage of as it could be a nice opportunity for momentum building to break out above the recent highs.

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