S&P 500 Price Forecast – Stock Markets Continue to Work Off Froth

Christopher Lewis
Published: Nov 20, 2023, 14:10 GMT+00:00

The S&P 500 has been very noisy over the last couple of sessions, as the market may be a little overextended.

S&P 500, FX Empire

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US Stock Market Forecast Video for 21.11.23

S&P 500 Technical Analysis

The S&P 500 has been going sideways over the last couple of days, and Monday started to see more of the same. All things being equal, I think this is a market that remains bullish, mainly due to the fact that there is a lot of hope out there that the Federal Reserve is going to loosen monetary policy, or at the very least stop tightening it. If that’s going to be the case, then stock traders will do what stock traders do, meaning that they will start buying again.

Beyond that, there’s also the possibility of the “Santa Claus Rally” coming over the next couple of weeks, and therefore I think you got to look at it through the prism of whether or not there is going to be possible, as the traders on Wall Street tend to buy stock at the end of the year, in order to show their clients that they own all of the “proper stocks.”

If we do pull back, I think there will be plenty of buyers underneath, and at this point I think there is a floor somewhere near the 4400 level, an area that had been massive resistance previously. With that being the case, I think you’ve got a “buy on the dip” scenario, but that’s assuming that we even get a decent pullback. For that matter, we could just take off to the upside and go look into 4650 level above. That would challenge the previous high, but at this point in time I think it’s a situation where the markets are looking to go higher one way or the other, at this point it’s whether or not we pullback in the short term?

The 50-Day EMA sits below the 4400 level as well and is rising, so that could be a situation where that offers support as well. Either way, I don’t have any interest in trying to short this market, as Wall Street already has the idea that it’s going to try to buy stocks into the end of the year, and of course we have just a handful of stocks propelling everything to begin with. In other words, you are not trading 500 stocks, you are essentially trading somewhere between 7 and 10.

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

About the Author

Being FXEmpire’s analyst since the early days of the website, Chris has over 20 years of experience across various markets and assets – currencies, indices, and commodities. He is a proprietary trader as well trading institutional accounts.

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