S&P 500 Price Forecast – Stock Markets Break Down

The S&P 500 has fallen rather hard during the course of the trading session on Thursday, as Tokyo and Australia both are looking very threatened at the moment, as the coronavirus has caused both those areas to close down. With that being the case, it looks as if there is a lot of fear out there and quite frankly stock markets are a little over stretched. This is not to say that anything has changed, just that a little bit of fear has come into what is a very complacent market.

S&P 500 Video 09.07.21

The 4200 level would of course be support, just as the 50 day EMA is reaching towards it. The 50 day EMA of course attracts a certain amount of attention anyways, so with that being the case I think what we are looking at is a scenario where the market needs to pull back even further, and the fact that we are seen such an extended mood during the trading session suggests to me that we may even drop down towards the uptrend line. For me, the “floor the market” is at the 4000 level, where there is a small gap.

As long as we can stay above there, things should recover given enough time. If we break down below that level, then I would be looking to buy puts, because I do not sell US indices due to the fact that the Federal Reserve will almost certainly step in and cause some type of interference. On the other hand, if we turn around and take out the top of the range for the trading session on Thursday, that would be an extraordinarily bullish sign.

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