S&P 500 Price Forecast January 25, 2018, Technical Analysis

The S&P 500 initially tried to rally, breaking above the 2850 handle initially, but pulled back again during the day on Wednesday. I think that the market should continue to find buyers on dips though, because the algorithmic traders have been out there jumping on anything that looks remotely like a 1% loss. The S&P 500 continues to represent the US economy quite well, as we are starting to see a lot of growth. The US dollar has fallen apart, and it’s likely that we should continue to see an upward pressure on stocks as it makes exports cheap in the United States. Beyond that, we have the tax reform bill that has recently passed, and that of course helps as well via corporate earnings.

Speaking of corporate earnings, they have been good so far, so that of course helps the S&P 500 also. I think that the market is essentially a “one-way bet”, and therefore I don’t have any interest in trying to short it. I think that longer-term, we will go looking towards the 3000 level above, but obviously there will be pullbacks occasionally to take advantage of. I think that longer-term, it’s likely that we will see a lot of noise, but it’ll be just that: noise. I believe that there is a “hard floor” in this market closer to the 2800 level.

S&P 500 Video 25.01.18