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S&P 500 Price Forecast – Stock Markets Continue to Chip Away at Resistance

By:
Christopher Lewis
Published: May 27, 2021, 16:23 UTC

The S&P 500 has shown itself to be a bit hesitant at the 4200 level, which is a large, round, psychologically significant figure, and an area where we have pulled back from.

S&P 500 Price Forecast – Stock Markets Continue to Chip Away at Resistance

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The S&P 500 has chip away at the 4200 level for a while but cannot quite take off yet. Ultimately, this is a market that probably breaks out to reach towards the 4400 level. The S&P 500 does tend to move in 200 point increments, so that would just be a simple extension of what we have been doing for a while. Underneath, the 50 day EMA is snaking right across the uptrend line, so it does make a certain amount of sense that there would be buyers down there as well.

S&P 500 Video 28.05.21

Liquidity measures continue to push stock markets higher in general, so I do think that the market cannot be shorted, and even if we break down below the uptrend line and the 50 day EMA, it is possible that we go looking towards the 4000 level where we would see a significant amount of support, not only due to the psychology of it, but also the gap.

If we were to break down below all of that, then I would be a buyer of puts as we go looking towards the 200 day EMA. The 200 day EMA is reaching towards the 3800 level, so I suspect that we could continue to see a lot of support in that general vicinity, so I would be willing to close things out at that point. Buying puts is as bearish as I get this market, and as a result I still favor the upside as we have been in such a strong move higher. Shorting this market has led to nothing but misery report 13 years.

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About the Author

Being FXEmpire’s analyst since the early days of the website, Chris has over 20 years of experience across various markets and assets – currencies, indices, and commodities. He is a proprietary trader as well trading institutional accounts.

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