S&P 500 Price Forecast – S&P 500 Looking Stretched

The S&P 500 has rallied a bit during the course of the trading session on Thursday, but quite frankly looks like it is a little bit extended at this point. I would anticipate some type of pullback in order to offer value, and therefore I have no interest whatsoever in trying to short this market. Quite frankly, the 4500 level should now be a bit of a floor, and therefore I would be looking for any type of support on a pullback in order to pick up value. The jobs number will probably have a major influence on the market, but perhaps only short-term. Because of this, I am simply looking for an opportunity to get involved but I do not want to chase the trade at this point.

S&P 500 Video 05.11.21

If we were to break down below the 4500 level, then the next support level will be the 50 day EMA, which is curling higher. I believe that the absolute “floor in the market” is down at the 4250 level, so it is nowhere near an area that I would be looking to buy puts in. With this being the case, I think this is a market that eventually will find its footing to the upside, but a little bit of gravity might help a lot in the short term. Ultimately, I believe that this market is going to go looking towards the 4800 level, followed by the 5000 level. We are at the beginning of the “Santa Claus rally” when fund managers out there try to chase returns. This will continue to help the S&P 500 through the rest the year.

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