S&P 500 Price Forecast – stock markets break down on Friday

The S&P 500 broke down on Friday to turn the Thursday candle into a “hanging man.” Ultimately, the market looks as if it is ready to start falling again, but the 2750 level also has a certain amount of importance.
S & P 500 daily chart, November 12, 2018

The S&P 500 is falling on Friday to show significant signs of bearish pressure. I believe that the market will continue to look very bearish going forward, unless of course we can turn around and break above the highs from Thursday. If we break below 2750, then I think that opens the door to 2700, followed by 2650. The recent low at the 2600 level has been tested several times and has offered support so if we were to turn on a break below that level it would be an extraordinarily negative turn of events.

S&P 500 Video 12.11.18

There is a certain seasonality to the markets now though, as we enter what would typically be the “Santa Claus rally.” That is a marketplace event that sends the market higher towards the end of the year as money managers try to make decent returns at the end of the year in order to give their client something to cheer on. Quite frankly, most money managers have suffered this year, and they will continue to try and own things so that they can make returns.

However, there are a lot of global concerns and of course the tariffs situation between the Americans and the Chinese will continue to be a major deterrent for risk appetite. I think that we are going to see a lot of noise between now and the end of the year, and it is probably only a matter of time before we fluctuate back and forth. With that in mind, I would be very cautious about my position size, and therefore only trade small amounts. I believe that the key is going to be the $2750 level.

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