S&P 500 Price Forecast – Buyers come in to pick up market after soft evening

The S&P 500 rallied after initially drifting lower in the Globex session, showing signs of life again. Having said that, the market is very likely to run into a lot of trouble above.
Christopher Lewis
S&P 500 daily chart, May 16, 2019

The S&P 500 has bounced from the 2800 level, which of course is a bullish sign but having said that it’s very likely that the recovery is going to run into some trouble above based upon the fact that we have broken a major uptrend line. That being the case, that previous uptrend line should be resistance, and therefore I’m looking to see whether or not you see exhaustion. The exhaustion of course is something that you should wait on and shouldn’t try to anticipate. Anticipating that type of exhaustion would be a good way to lose money. We need the market to tell us it’s time to get short, and until then it’s probably best to sit on the sidelines.

S&P 500 Video 16.05.19

Poor economic numbers of the United States, retail sales during the day on Wednesday, of course should add more negative pressure. However, it appears that traders in the United States or possibly looking at the idea of the Federal Reserve cutting rates in the future as a bit of a reason to go long. Overall though, this is probably going to end up being a simple retest of the uptrend line, and a failure in that region is an invitation to start selling again. Otherwise, if we can break above the uptrend line then it’s likely we go to the 2950 handle. The alternate scenario of course is that we break down below the 2800 level, which is a signal that we should go down to the 2750 level, possibly the 2700 level.

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