S&P 500 Price Forecast – Stock markets await Federal Reserve

The stock markets are awaiting the Federal Reserve statement, and ultimately this is a market that is waiting to see whether or not the Federal Reserve will bow down to Wall Street and offer more monetary methadone.
Christopher Lewis
S&P 500 daily chart, June 20, 2019

The S&P 500 pulled back slightly waiting for the Federal Reserve statement, and quite frankly at this point I think that if we get a bit of a “sell the news” event, the 2900 level underneath should be massive support. A break down below there and perhaps even the bottom of the session on Tuesday, then we could see a significant press lower. However, I think unless the Federal Reserve sounds hawkish, it’s very unlikely that this market will break down for anything more than a short-term pullback.

S&P 500 Video 20.06.19

Having said that, the 2950 level above is massive resistance, and it’s going to be difficult to break above there. If we can break above there, then it’s very likely we could go looking towards the 3000 handle. Short-term pullbacks are buying opportunities, with the 2880 level offering the bottom of that massive support level, which was a huge gap. Looking at this chart, I think we are trying to build up enough momentum to finally break out to the upside.

If the Federal Reserve does in fact cut rates, is very likely that we will continue to find more bullish pressure. Ultimately, this is a market that has been bullish, and I think that eventually there are buyers underneath just waiting to get involved. As far shorting is concerned, we would need to close below the 50 day EMA on a daily chart. At that point, it could open the door down to the 2750 level underneath. Expect volatility regardless though.

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