S&P 500 Price Forecast – Stock Markets Continue to Search For a Bottom

S&P 500 Technical Analysis

The E-mini contract initially fell during the trading session on Monday in the S&P 500 but has turned around to show signs of life again. By doing so, the market looked as if it wants to bounce but I also recognize that there is a lot of noise above. Any rally at this point should be thought of as a potential selling opportunity, especially if we can get back to the 4000 handle.

Keep in mind that the market is going to be waiting to see what Jerome Powell says, which is a bit exhausting due to the fact that everybody already knows what he’s going to say. However, there are plenty of people out there for whom hope burns eternal, so will have to wait until the announcement.

If we were to break down below the bottom of the candlestick from the past couple of days, then 3800 will be targeted. If we break above the 4000 level, the 50-Day EMA is just 34 points above there and sloping lower. There’s absolutely nothing out there that tells me I should be buying stocks, so at this point, I am more than comfortable simply waiting for an opportunity to start shortening at a higher level again.

That being said, 3800 becomes important because if we break through there, it’s very likely that we test the lows again and perhaps go even further than that. The massive candlestick that happened last week is the type of candlestick that almost never happens in a vacuum, so I think we are in the midst of kicking off the next leg lower.

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