S&P 500 Price Forecast – Stock Markets Continue Advance

The S&P 500 initially pulled back during the trading session on Monday, showing signs of weakness, but perhaps part of this was due to the fact that Robin Hood and Interactive Brokers both went down during the day, causing a bit of a liquidity crash. In fact, Interactive Brokers makes up roughly 25% of E-mini S&P 500 futures contracts traded. With that being the case, I would only read so much into a pullback, and would read a lot more into the fact that we are in a strong uptrend, and as I write this currently threatening the 3700 level.

S&P 500 Video 08.12.20

If the market can break above the 3700 level, then the market is likely to go looking towards the 3800 level. Beyond that, I think that we will eventually go looking towards the 4000 handle, based upon the large range that we have just broken out of. After all it measures roughly 400 points and extrapolating a 400 point gain from the 3600 level then allows the market to go looking towards the 4000 level. To the downside, I see the 3500 level as a potential support level based upon the 50 day EMA as well, so either way I am a buyer of dips and have no interest whatsoever in shorting this market.

All things being equal, I think this is a market that will continue to grind higher, not much more than anything else. I am not looking for some type of massive explosion to the upside, just that people will continue to pick up dips going forward as we are almost certainly in the midst of the widely hoped for “Santa Claus rally” that can often happen in December.

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