S&P 500 Price Forecast – S&P 500 Tumbles After CPI

S&P 500 Technical Analysis

The S&P 500 has fallen rather significantly during the early hours on Wednesday as we got the CPI numbers coming in hotter than anticipated. Quite frankly I think this is setting up for a nice buy on the dip type of opportunity so I’m waiting to see some type of short-term bounce.

The 50 day EMA underneath could offer that bounce, but quite frankly, I think just the habitual momentum driven trading that we see in New York could cause it as well. Given enough time, somebody will go looking at this market as an opportunity to pick up cheap contracts. And that’s essentially what I’m going to stand on the sidelines and do. I want to see the market fall, and I want to see it bounce before I start buying.

I don’t know what timeframe I will do that on. It might be as short as the 30 minute chart, but looking at the daily chart, you can see that we are setting up for a potential consolidation phase. And that makes sense considering that we had gone straight up in the air for so long and quite frankly, probably need to take a bit of a breather anyway. Pay attention to interest rates.

We have been closely monitoring what the Fed may or may not do, and at this point in time, we’re down to two to three cuts at the end of the year as far as interest rates are concerned instead of what we had once priced in, which was seven. Despite that, the S&P 500 has continued to grind higher and until proven differently I think that’s what eventually happens, but we may be able to step back and pick up a bit of value in this contract.

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