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

The S&P 500 has done very little during the trading session on Thursday as we continue to head levitate around the 3900 level. This of course is a large, round, psychologically significant figure and at this point we are a little bit overdone. The question now is whether or not we pull back in order to find buyers underneath, or if we simply kill time by going sideways before going higher. Longer-term, this is a market that should go looking towards the 4000 handle, which is by target due to the previous consolidation that we had seen between the 3200 level on the bottom and the 3600 level on the top.

S&P 500 Video 12.02.21

To the downside, the 3800 level offers plenty of support, just as the 50 day EMA is starting to reach towards that level. The uptrend line underneath also offers quite a bit of support. All things being equal, this is a market that I think offers plenty of value on these dips, especially as the Federal Reserve and Congress are willing to flood the markets with all kinds of free cash in order to keep everything afloat. I know that sounds cynical, but it is the reality of life since the Great Financial Crisis. In fact, I do believe that we not only continue to rally over the longer term, but we will break well above the 4000 handle. On the other hand, if we were to break down below the uptrend line, then we could go down to the 3600 level, but I do believe that the 200 day EMA will eventually offer a longer-term support level as well.

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