S&P 500 Price Forecast – Continue to Rally Based Upon Stimulus Hopes

The S&P 500 has rallied a bit during the trading session yet again on Friday as traders continue to bank on the idea of stimulus. Ultimately, this is a market that I think will continue to see a lot of volatility, but the market will continue to favor the upside in general, which is the typical momentum for the S&P 500 anyway. I think it is only a matter of time before we see a break to the upside in a continuation of the market towards the highs again. The 3600 level is calling, although the highest technically 3580 or so.

S&P 500 Video 12.10.20

The market pulling back should be thought of as a buying opportunity and I have no interest in shorting because quite frankly you cannot keep this market down. One has to wonder whether or not we are on the precipice of something big again, but when you look at the totality of the market, the S&P 500 index is not designed to fall. Because of this, you simply cannot short it. The markets are highly manipulated by the Federal Reserve and liquidity measures, so there is no point in fighting it.

There are only a handful of stocks that move the S&P 500, so as long as all of the big ones are going well, the index will do well. This is the biggest mistake that retail traders make, they assume that the S&P 500 is an index of 500 companies that are equally weighted. That is not even close to being true.

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