S&P 500 Price Forecast – Stock markets continue to Rally

The S&P 500 as well as the other indices in the United States continue to rally as Thursday was indeed a very bullish. That being the case, it looks as if testing the bottom of the uptrend line is the first barrier that we will have to overcome. It coincide quite nicely with the 2900 level, so if we were to break above there, that would be an extraordinarily bullish sign.
Christopher Lewis
S&P 500 daily chart, May 17, 2019

The S&P 500 initially pulled back a little bit during the Globex session but recovered quite nicely and shot straight up in the air as the Americans came on board. We are getting close to some pretty precipitous resistance though, in the form of the 2900 level. If we can finally overtake the 2900 level, then the market is very likely to continue to go to the 2950 handle.

S&P 500 Video 17.05.19

The biggest problem with the market right now is that it’s only going to take a tweet or some type of news item out of China to send the market flailing right back down to earth. The 2800 level seems to be the “basement” at the moment, so therefore I think that any breach of that level would be thought of as serious trouble. I would not be surprised at all to see this market pull back a bit, and perhaps even try to consolidate in this general vicinity.

Again the biggest problem that you’re going to face is that the market is trading solely on emotion right now. Signs of exhaustion at the 2900 level could be looked at as a harbinger of a “lower high”, and the beginning of the next attempt at a longer-term trend change. At this point, I advise most of my clients to stay out of this market as it is simply far too dangerous.

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