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S&P 500 Price Forecast – Stock market recovers

The US stock markets initially sold off slightly in the futures markets as traders worried about the US/China trade relations souring. However, the market has returned to show signs of strength later in the day, and it now looks like the overall uptrend is going to perhaps be stabilize.
Christopher Lewis
S&P 500 daily chart, October 08, 2019

The S&P 500 has initially pulled back through the 200 day EMA during the day on Monday but found enough support below at the uptrend line to continue the overall upward channel. There are plenty of reasons to think that volatility will pick up in the stock markets, as the US/China trade talks certainly take front and center this week. As long as we can stay above the uptrend line, and of course the 200 day EMA, it’s likely that we could continue to reach towards the highs again. Beyond that, the Federal Reserve is likely to step in and liquefy the markets going forward as well. In other words, traders continue to talk about the “Powell put.”

S&P 500 Video 08.10.19

If we were to break down below the 2800 level though, that could send this market down to the 2900 level, perhaps even lower than that. All things been equal though I think we are more than likely going to see more upward pressure than down, as the market simply is still in a large uptrend and all things being equal stock markets rally over the longer-term anyway. To the upside, I think the 2940 level is resistance, but I also believe that market pressure in that area could be a bit strong. A break above that level opens up the door to the 3000 handle, followed by the 3025 level. In the meantime I think that pullbacks are going to continue to be looked at as potential buying opportunity as long as we can stay in the channel.

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