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S&P 500 Price Forecast – Stock Markets Continue Towards All-Time Highs

By:
Christopher Lewis
Published: Feb 5, 2021, 18:29 UTC

The S&P 500 has rallied yet again during the trading session on Friday after the weaker than anticipated jobs report.

S&P 500

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The S&P 500 rallied after the weaker than anticipated jobs report, which should not be a huge surprise as Wall Street focuses on stimulus and liquidity only. That being the case, “bad news is good news” continues to be the norm. Ultimately, this throws fundamentals and risk appetite into a bizarre mix that we have seen play out of the last 13 years. It is because of this that I have told you multiple times never to short an index, because quite frankly every time you do there is about a 95% chance that you lose money.

S&P 500 Video 08.02.21

As long as we continue to have liquidity driven markets, it is really not worth your time to get too cute and trying to short the stock market. We are at all-time highs, and almost certainly going to go looking towards the 4000 level given enough time. In fact, it is almost a given at this point, which although is actually a contrarian indicator, the reality is that the last 13 years have been completely distorted by the Federal Reserve. This will continue to be the case, so you should look at the stock market indexes through the prism of either buying or sitting on the sidelines.

We do have a massive support level underneath in the form of the 3800 level, and then again in the range of the 50 day EMA and the uptrend line. As Joe Biden talks of the need to flood the economy with $1.9 trillion, Wall Street is celebrating because they know a certain amount of that is going to end up back in the casino. As long as that is going to be the case, you have to be a buyer of dips.

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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