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S&P 500 Price Forecast – S&P 500 Continues to See Extension

By:
Christopher Lewis

The S&P 500 continues to see a lot of buying pressure, despite the fact that the early hours on Monday are rather quiet and nonchalant acting.

S&P 500, FX Empire

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US Stock Market Forecast Video for 13-02-2024

S&P 500 Technical Analysis

The S&P 500 did almost nothing in the early hours of Monday, as we continue to see a lot of overextension in the stock markets around the world. That being said, I think this is a scenario where traders will be looking at any pullback as a potential buying opportunity and therefore, I think you’re looking at the most obvious level underneath, which of course would be the 5,000 level. 5,000 of course is a large round number, and it does make a lot of sense that we would see traders try to defend that. There’s probably quite a bit of option action there as well, so pay attention to that. Any breakdown below that level could open up a move all the way down to the $4,850 level.

This also is where we start to see the 50 day EMA coming into the picture closer to the 4,800 level. This is a market that has been straight up in the air for the last several months, and therefore I think we have a situation where value hunting will be the only way to play this market. Keep in mind the S&P 500 is driven by just a handful of stocks. It’s not an equal weighted index, so there’s no need to trade it as such.

In this environment, I like the idea of taking advantage of value. Now that we have closed well above the 5,000 level, I think the shock of that goes away, but it’s still just a bit too overdone to simply be reckless jumping into this market with huge positions. You have to look at every negative move as a potential buying opportunity, at least until the interest rate changes, or the Fed starts to panic cut interest rates, which I don’t think they’re anywhere near that, but if and when that happens, that’s the death knell for the S&P 500. In the meantime, you’re just buying every dip, right along with everyone else, despite the fact that the market is so obviously overdone at this point. I have no interest in trying to short this market, as it has a mind of its own at the moment.

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

About the Author

Being FXEmpire’s analyst since the early days of the website, Chris has over 20 years of experience across various markets and assets – currencies, indices, and commodities. He is a proprietary trader as well trading institutional accounts.

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