S&P 500 Price Forecast – S&P 500 Does Very Little on The Last Day of The Year

US Stock Market Forecast Video for 02-01-2024

S&P 500 Technical Analysis

You can see we initially did try to rally during the day on Friday, but the 4,800 level continues to be far too difficult to get beyond. It’s basically the all-time high, and therefore it’s not a huge surprise to see that we are struggling to get above there. The market is dealing with illiquidity as we are between Christmas and New Year’s Day. This is one of the more difficult times to get overly aggressive, and professional traders will typically avoid it altogether.

And of course, this is the last trading session of the year, so not a whole lot is going on. Really at this point in time, only the most desperate traders are out there trying to earn a dollar. And the other traders out there, of course, are traders that are closing down positions. Think of it this way. The S&P 500 has rallied 600 points in two months, which is extraordinary.

It translates to basically 17% gains. Why would you not take gains heading into the new year with that type of move, especially knowing that liquidity is going to disappear? And on top of that, early next year, there will be a bunch of inflation numbers that could spook the market. As things stand right now, this is a market that I think you need to buy dips.

So, I’m looking at a couple of different areas, most specifically the 4700 level. 4700 is an area that we’ve seen support at previously, but quite frankly, I’d love to see the S&P 500 drop below there and go looking to the 4600 level where the 50-day EMA is racing towards. Alternatively, we could break above 4800 and continue to go higher, but I think at the very least, you’re going to need to see some type of consolidation in this area, just to work off some of the excess froth, chasing the trade all the way up here is absolutely reckless.

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