S&P 500 Price Forecast – Markets Are Approaching All-Time Highs Again

The S&P 500 has gapped higher to kick off the trading session as we continue to test the all-time highs in the neighborhood of the 3400 level. Quite frankly, one of the biggest problems is market has right now as there is absolutely no breadth underneath, as it has just been a lot of the usual suspects driving the index higher. During the previous session, we had 25 stocks make new all-time highs, which is not very comforting when you are at all-time highs in the index. This shows just how concentrated the money is right now, so if something goes wrong with a handful of companies, things could get ugly rather quickly.

S&P 500 Video 20.08.20

Further causing a bit of resistance is the fact that the US dollar is recovering a bit during the trading session on Wednesday so that puts a little bit of downward pressure on stocks. Even though we are up about 17 basis points midday, the reality is we need to see a daily close above the 3400 level to start buying again. Furthermore, I would like to see the 3410 level cleared, because it gives us a little bit of leeway as well.

Pullbacks at this point in time are possible and for that matter very likely, but I am not a seller, rather I am looking for support of candlesticks to take advantage of value in an index that clearly wants to go higher, it is just looking for reason at the moment. I believe that the 3200 level underneath will serve as a significant floor in the market as it has been supportive in the past and now, we have the 50 day EMA in that same neighborhood.

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