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

The S&P 500 will be awaiting the Federal Reserve on Wednesday, and the small candle that we see for the Tuesday session shows how we are on hold. Traders will look to Jerome Powell and his statement to determine whether or not the Federal Reserve is going to remain as hawkish as it had been. There are signs of it softening, but quite frankly I think that if we do get a relief rally based upon a dovish, or at least a bit more dovish statement will offer selling at higher levels. Ultimately, that would suggest that perhaps the economy is in more trouble than once believed. We may get a quick pop from there, but I would anticipate that the sellers will come back rather soon.

S&P 500 Video 19.12.18

If the statement is rather hawkish, then we will continue to go lower, perhaps down to 2500. I think it’s probably best to wait until the daily close to make any type of trading decision, so at this point I would stay neutral and out of the market, with an eye on shorting rallies that show signs of exhaustion, especially between the 2650 and the 2700 levels. Either way, I think it’s only a matter time before the sellers come back in, so therefore I believe that patients may be needed on a rally, but you will eventually see that rollover that you can take advantage of. At this point, I don’t see a path higher for any significant amount of time.