S&P 500 Price Forecast – Stock Markets Crater Again

The S&P 500 has fallen rather hard during the course of the trading session on Wednesday as we have started to test the 4100 level. At this point, the market looks as if it is trying to find a little bit of support, not only do to the 4100 level, but possibly the 50 day EMA. If we break down below there, then the market is likely to go looking towards the 4000 where a huge gap appears.

S&P 500 Video 13.05.21

While I do not advocate shorting stock market indices in America, because they are far too manipulated, I do think that these moves offer a nice buying opportunity given enough time. I think the 4000 level is probably the most obvious area, because not only is it a large, round, psychologically significant figure, but it is also backed up by that gap I mentioned previously, and we have seen the 50 day EMA pierced more than once only to turn around and rally again. I think that is what we are about to see as traders are starting to freak out about the idea of inflation. The reality of course is that the Federal Reserve is nowhere near doing anything to tighten monetary policy, so I think given enough time traders will come back to that realization.

Remember, stock markets have nothing to do with the underlying economy but everything to do about monetary policy. That has been the game for the last 13 years, and I do not think that changes anytime soon. At this point in time, I would simply stand on the sidelines and wait for some type of opportunity to pick up a bit of value going forward.

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