S&P 500 Price Forecast – Continue to Meander in Thin Holiday Trading

The S&P 500 initially pulled back a bit during the trading session on Friday, but at this point in time we are simply sitting just above the 3600 level as we are trying to determine whether or not the recent breakout will stick. I do think it will find buyers, but one thing that you should keep in mind is that this week has been the Thanksgiving week so obviously liquidity may have been a bit of an issue. Pullbacks should continue to attract attention, and that attention should come in the form of buying. The 50 day EMA sits at the 3467 level and is reaching towards the 3500 level.

S&P 500 Video 30.11.20

Based upon the previous rectangle that we are broken out of; the market extrapolates a move to the 4000 level based upon the measured move. All things being equal, this is a market that should continue to see a lot of interest as the Federal Reserve continues its quantitative easing policies, and of course people are starting to try to price in earnings for 2022, which is a bit of an outlier and needless to say somewhat concerning. Nonetheless, the momentum is still to the upside and until things change, you cannot be a seller of this market. At this point, it is also worth pointing out that the US dollar is starting to get hit rather hard, and if that continues it should continue to drive the value of stocks higher in general due to historical correlation between the two.

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