S&P 500 Price Forecast – Stock Market Continues to Move on Powell Comments

The S&P 500 has rallied yet again during the day on Monday, as Jerome Powell recently stated that although tapering probably happens between now and the end of the year, the reality is that interest rate hikes are nowhere near. With this being the case, the market has been rallying for quite some time and it continues to same behavior that we have seen multiple months in a row. The 50 day EMA underneath is massive support, sitting just below the uptrend line.

S&P 500 Video 31.08.21

It is not until we break down below both of those indicators of support that I would consider shorting, and even then, I would only be a buyer of puts as you simply cannot short these indices as the Federal Reserve will step in and either say or do something to spook the markets back to the upside. In other words, it is about mitigating your risk, and making sure that you are always protected from manipulation.

To the upside, the market is likely to go targeting the 4600 level, as we are now clearly above the 4500 level and of course the market does tend to move in 200 point increments, something that is worth paying close attention to. Longer-term, we probably go looking towards 5000 but that will be a target that investors look at, not necessarily something that we would see anytime soon. As long as the Federal Reserve keeps the spigots open, and let us be honest here, they will, then stock markets will be a major beneficiary as saving money makes no sense with almost no interest accumulated. The Federal Reserve continues to force people into the stock market.

For a look at all of today’s economic events, check out our economic calendar.