S&P 500 Price Forecast – S&P Continues to Look at 4800

US Stock Market Forecast Video for 29-12-2023

S&P 500 Technical Analysis

The S&P 500 did try to rally a bit overnight, but it appears that the 4800 level is going to continue to be very difficult to overcome. This isn’t a huge surprise. It is an all-time high, and we are threatening to break out, but we also have to wonder about liquidity. Because of this, caution is advised as there can be a lot of erratic and strange moves at this time of year.

It would not surprise me at all to spend some time going back and forth in this area as we are between the Christmas holiday and the New Year’s Eve holiday. So therefore, you have to ask questions about whether or not there are going to be enough volume out there to even get moving with this. I think you do favor buying on pullbacks, but this is also a market that’s overbought.

Rallying something like 17% from Halloween is not normal behavior. So, I think that if we were to pull back to the 4700 level, we could enter a period of consolidation. The traders will simply try to work off some of the excess froth. If we break down below the 4700 level, then we could go down to the 50 day EMA, which is closer to the 4550 level. Underneath there, we have the 4500 level. All of these areas are viable support levels, so clearly you cannot be a seller of this market, but if you are patient, you might be able to pick up a little bit of value on a dip, instead of chasing the market all the way at these extreme highs. The alternative scenario, of course, is that we just continue to go higher. And if we break the 4,800 level, one would think that we will go to 5,000. But in this environment, things have been so overdone that we desperately need a pullback.

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