S&P 500 Price Forecast – Stock Markets Continue to Grind Higher

The S&P 500 has shown itself to be strong again during the trading session on Monday by virtue the fact that it was challenging the 3900 level. This is obviously a large, round, psychologically significant figure that people will pay attention to, and therefore I think what we are seeing here is an opportunity to buy pullbacks with a little bit more confidence.

S&P 500 Video 09.02.21

We are still going through some earnings but at the end of the day this is all about liquidity and the Federal Reserve protecting Wall Street. As you know by now, when the stock markets fall far enough, the Federal Reserve will come in and do something to pick back up. This typically takes place in the form of buying corporate debt or loosening some type of exotic monetary policy. With that in mind, Wall Street has been trained to buy the dips going forward and I do not see that changing anytime soon.

When you look at the past, we had been consolidating in an area between 3200 on the bottom and 3600 on the top. That was a 400 point move that broke out back in late November. The extrapolated “measured move” from that action suggests that we will go looking towards the 4000 level. There is absolutely nothing on this chart that tells me we cannot make that happen, although we do not necessarily have to make that happen quickly as you have seen. There is a massive amount of support underneath at the 3800 level, the 50 day EMA, and of course the uptrend line that I have marked on this chart.

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