SP 500 Price Forecast – Continue to Find Support at Same LevelThe stock markets have fallen hard during the trading session on Thursday but has turned around to show signs of resiliency again at the 3300 level.
The S&P 500 has fallen initially during the trading session on Thursday, reaching down towards the 3300 level, and then bouncing rather significantly. At this point, the 50 day EMA is massive support as well, so I think it is very likely that we will continue to see a lot of back-and-forth trading. If we were to break down below the lows of the trading session on Thursday, then it would be very negative, sending this market down to the 3200 level.
S&P 500 Video 18.09.20
We need to see the US dollar start to soften a bit if the S&P 500 is to take off to the upside because of the massive negative correlation that we have had over the last 30 days, measuring -0.95, which is almost a perfect ratio. At this point, I think that we are simply consolidating in trying to figure out what to do next, and therefore it is probably going to continue to see a lot of volatility, but quite frankly I think that is going to be the case at least until the election.
Buying on dips works in theory, but to be honest with you I would like to see the market lead the rectangle on the chart before putting any serious money to work, because there are a multitude of reasons to think that the market could fall apart, not the least of which is the underlying volatility in various asset classes to suggest that perhaps there are a lot of fears out there, something that is not necessarily conducive to a strong S&P 500. Caution is without a doubt the word of the day.
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