S&P 500 Price Forecast January 3, 2018, Technical Analysis

The S&P 500 has gapped higher at the initial move in trading on Tuesday, but then pullback to fill that gap. We broke to the upside, and it looks likely that we are trying to build up the necessary momentum to break out above the 2700 level, an area that has been massively resistive. A break above that level is a sign that the market is ready to go higher, perhaps reaching towards the 2800 level. I think that short-term pullbacks offer buying opportunities between now and the break out to the upside, and that there are plenty of opportunities to go long going forward. I think that the 2650 level underneath is massively supportive, and an area that should continue to lift the market. With higher corporate earnings via lower taxes, the American stock market should continue to perform reasonably well.

It’s not until we break down below the 2600 level that I would consider shorting the S&P 500, and that seems very unlikely to happen right now. I recognize that it may take more momentum building to finally break above the 2700 level, but eventually we will do that, and you can add to a core long position. The next stop will be the 2750 handle, followed very quickly by the 2800 level. Longer-term, I think we are going to aim for the 3000 handle. Volatility will be a constant, so be careful and be patient when building your trading position as I think longer-term we are still going to see plenty of movement.

S&P 500 Video 03.01.18