S&P 500 Price Forecast – S&P 500 Reaching Overbought Conditions

US Stock Market Forecast Video for 07.11.23

S&P 500 Technical Analysis

The S&P 500 has rallied over the last week or so, and it looks like we are hanging out at the top of the potential descending channel, and are above the 50-Day EMA. That being said, we are also in an area that previously has seen a lot of resistance, so we are likely to see some type of reaction. One of the things that has been working against the S&P 500 until recently has been the US dollar. The US dollar just had a very negative week, but it was only the 3^rd negative week out of the last 11. In other words, we are not quite to the point where things have changed significantly.

The question now is where do we go next? I think that’s a lot of what people will be watching, and I think a gravity does come back into the picture sooner or later. After all, it is an extraordinarily overbought move that we have, and even if we were to continue going higher, it would make a certain amount of sense that we pull back in order to attract more buyers. I would think at least the 50-Day EMA is reasonable, perhaps even the 200-Day EMA. If we do continue to go straight up in the air from here, I would be very cautious about that type of move, because you don’t want to be the person chasing the market after it’s already made most of its move.

Until the 10-year yield drops significantly in the United States, it’s very unlikely that the stock market will hang on to these gains for big moves. Unfortunately, Wall Street got overly excited about the possibility of the Federal Reserve slowing down and perhaps even reversing monetary policy long before the Federal Reserve is thinking about doing it. We have inflation numbers coming out next week, and that could cause a lot of trouble as well.

Furthermore, you have to be cognizant of the fact that there are 7 stocks that make up about 30% of the S&P 500. In other words, what you are looking at is essentially an ETF of the biggest mega-cap names on Wall Street.

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