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

The S&P 500 fell during the trading session on Friday, slicing through the 50 day EMA before recovering. At this point, the market does not look like it knows what to do yet, and when you look at the weekly chart there is a lot of back-and-forth pressure. However, on the daily chart it does suggest that perhaps we probably have more upward pressure than down, but we need to clear the 3420 level to be free to go much higher. Otherwise, you are looking at a back-and-forth type of scenario.

S&P 500 Video 05.10.20

Looking at the chart, I think that we continue to go sideways between now and either a stimulus announcement, or some type of resolution to the election. I think there are a lot of people out there are concerned about the markets, and rightfully so. The US dollar has been strengthening and that works against the value of the S&P 500 so that is one of the many reasons that I think that the market is going to continue to be a bit soft in general. Keep in mind that the 200 day EMA sits just below the 3200 level, so we may get a slight bounce there, but the longer-term chart suggests that once we break out of this 200 point range, we will have a 200 point move in one direction or the other.

I do not have any interest in trying to short this market quite yet, because I recognize that at any moment somebody could come out to pump it back up based upon stimulus or something like that. However, if the 3200 level gives way we could see an acceleration to the downside.

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