S&P 500 Price Forecast – S&P 500 gets boost from Jerome Powell

The S&P 500 has rallied significantly during the trading session on Friday, breaking above the top of the hammer that had formed on Wednesday, and testing the 20 day EMA. Ultimately, the market broke above the 2500 level which is also important, and the fact that Jerome Powell now suggests that we are looking at a Federal Reserve that might be more willing to pay attention to markets, the stock traders in America feel as if they are being bailed out.

S&P 500 Video 07.01.19

However, I do see trouble on the horizon and would be remiss if I didn’t mention it. The 2600 level above is a previous support, so it should now be resistance. Beyond that, I think that what we are looking at is a scenario where if things really are going to get worse, and the Federal Reserve is willing to recognize that, then why are people being pushed into stocks again? After all, the “bad news is good news” scenario looks very unlikely to continue to push this market higher. We need to see good earnings reports and more importantly for some companies, a resolution to the US/China trade dispute to get things going much quicker. This is a very bullish candle, but typically when we see these type of bear market moves, the “rip your face off” rallies occur quite frequently. However, it’s not until we close above the 2600 level that I’m a bit more convinced. I’m not saying we can’t go there, most certainly we can, but I still believe that it’s easier to short this market at resistance above.