S&P 500 Price Forecast – stock market futures quiet during holiday

The S&P 500, as well as the other indices in the United States were closed during the trading session on Monday, although we did have futures electronic trading in the Globex. That being the case, volume was very light so I would read too much into the daily candle.
Christopher Lewis
S&P 500 daily chart, January 22, 2019

The S&P 500 has seen a lot of back-and-forth trading in a very tight range during the day on Monday as it was Martin Luther King Junior holiday in the United States. That being the case, we need to look at the longer term chart and the bigger picture of 2700 above being the next barrier that will be difficult for traders to overcome. If we get a slight pullback from here, it wouldn’t surprise me to see the 50 day EMA, pictured in red, to offer dynamic support. If we can break above the 2700 level, then the market could go to the 2800 level given enough time. If we break down below 2600, then I think the S&P 500 could very well rollover but keep it in mind that there is a lot of headline risk out there and noise that will continue to weigh upon the market. Not the least of which is that we are in the middle of earnings season, and that of course can always throw monkey wrench into the entire situation.

S&P 500 Video 22.01.19

That being said, the one thing the we have seen his resiliency by the bullish traders out there, although the volumes weren’t exactly exciting, so that keeps us a bit cautious, as there is a lot of danger out there. At the very least, you should probably keep your position size small regardless of which direction you choose to follow. In the short term, I think we have a lot of choppiness but with a slightly upward tilt.

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