S&P 500 Price Forecast – Stock Markets Continue to Wait for Catalyst

US Stock Market Forecast Video for 08.03.23

S&P 500 Technical Analysis

The S&P 500 initially tried to rally a bit during the trading session on Tuesday but gave back gains rather quickly at the previous resistance area. Alternatively, the 4100 level above will continue to be trouble, and if we can break above there, it would obviously be a very bullish sign. That being said, the market then continues to see a lot of resistance near the 4200 level as well. The 4200 level being broken to the upside could be a very bullish sign, but it seems like it’s almost impossible to happen in this environment.

That being said, the market is currently waiting on Jerome Powell to give his testimony to the U.S. Congress, and therefore it will continue to be very noisy. Nonetheless, the Federal Reserve continues to talk about staying tight for longer, and therefore it’s very likely that stocks will eventually sell off as a result. The 50-Day EMA and the 200-Day EMA indicators currently sit just below, and that of course is going to continue to be worth watching. With this, we would see a huge move lower based upon a break of that, perhaps down to the 3900 level. Anything below there then opens up a bit of a “trapdoor” of even more selling, perhaps sending the S&P 500 down to the crucial 3800 level where we had bounced from previously. The market will continue to be very noisy, but I also recognize that the fluid attitude of fundamental traders and of course technical traders will continue to be a bit of a headache.

The market struggles to find any type of straightforward and clear trading signal, and I think that’s going to continue to be the case. Quite frankly, Wall Street has been fighting the Federal Reserve for a while now, and it seems like every time that the decision is made to listen to the central bank, people will turn around and find some type of narrative to start buying stocks again. Nonetheless, this looks very nasty and therefore I think it’s probably only a matter of time before we get a big flush lower. I would be cautious in any position that you find yourself in.

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