S&P 500 Price Forecast January 5, 2018, Technical Analysis

The S&P 500 exploded to the upside during the trading session in New York, as we have seen the market slice through the 2725 handle. By doing so, the market looks likely to go to the 2750 handle, which is the next round figure. I think the pullbacks continue to offer value and that the S&P 500 should continue to be a market that people are willing to pick up on dips, which based upon expected corporate earnings should continue to offer value. I think that the 2700 level underneath will be a bit of a floor, but even if we were to break down below there, I’m not concerned about the S&P 500 until we break down below the 2650 handle. I would be surprised if we even came close to that level, so I suspect that as volume picks up for the year, we will continue to see a positive bias.

Longer-term, it’s likely that the S&P 500 is looking towards the 2800 level, which is the next large figure. I think that the tax reform being passed in America continues to be a main driver of the S&P 500, and quite frankly money managers coming back from the holidays need to put money to work. Most money managers are on the buy side, so therefore there’s a natural proclivity for the S&P 500 to rally during this time. With this in mind, I think that once the jobs number comes out, it’s likely that the market will be very choppy and volatile, but I think in the long run we will find reasons to gain.

S&P 500 Video 05.01.18