S&P 500 Price Forecast – Markets Looking a Little Tired

The S&P 500 has initially pulled back a bit during the trading session on Tuesday as we try to figure out what we are going to do next. With that being the case, I think what we are ready to see is a bit of a pullback, which should be healthy considering how overbought we had gotten. Those pullbacks will almost certainly be bought into, especially near the 4000 handle. The 4000 handle is of course a large, round, psychologically significant figure and of course there is a bit of a gap in that area that should continue to keep the market afloat.

S&P 500 Video 07.04.21

Even if we break down below there, it is very likely that the market would see support all the way down to at least the 50 day EMA. Even if we break down below the 4000 handle, then it does make sense that we would see a little bit of negativity creep back into the market but that would be short-lived at best. The move above 4000 was strong, mainly driven by the jobs report on Friday that added 916,000 to the payrolls. This is a market that continues to be elevated not only due to liquidity, but the fact that a lot of traders are banking on the “reopening trade”, so as long as we do not get a massive spike in yields again, this is a market that should continue to go higher given enough time. I do expect to see a lot of volatility, but that choppiness is something that I will take advantage of when the market starts to get a little bit on the “Cheapside.”

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