S&P 500 Price Forecast – Stock Markets Continue to Look Vulnerable

The S&P 500 initially rallied during the trading session on Monday to kick off the new year. That being said, the 3700 level underneath still looks to be rather supportive, even though we did fall rather significantly after the initial gains. There are a lot of concerns out there, not the least of which is the Georgia Senate runoff, which the market will be hoping is one by the Republicans in order to keep at least some semblance of balance in monetary and government policy. If it does in fact turn out that the Democrats run the Senate as well, that could be very concerning for some traders.

S&P 500 Video 05.01.21

From a technical analysis standpoint, the 50 day EMA sits at the 3600 level roughly, and I do think that people will continue to pay close attention to it. Because of this, I would look at pullbacks as potential value plays, as the market will certainly be looking to take advantage of cheap stocks. To the upside, the 3800 level offer a little bit of resistance, but I believe that the real target for longer-term traders is still the 4000 level, something that we will almost certainly hit during the year 2021.

I do not necessarily believe that we will go straight there, but it certainly will be something that a lot of traders will be aiming for. At this juncture, I believe that buying the dips continues to be the best way forward, but I also believe that it is going to be a very volatile year. At this point, people are trying to bank on life after the vaccine, but we have a rough couple of months ahead of us.

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