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S&P 500 Price Forecast – Stock Markets Drift Lower in Early Trading

By:
Christopher Lewis
Published: May 24, 2023, 14:00 UTC

The S&P 500 has fallen a bit during the trading session on Wednesday in early hours as we are looking at a potential test of the 50-Day EMA.

Wall Street, FX Empire

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US Stock Market Forecast Video for 25.05.23

S&P 500 Technical Analysis

The S&P 500 fell slightly early during the trading session on Wednesday as we continue to see a lot of negativity. That being said, it is still a significant uptrend that we are in, and this pullback is probably a reaction to the 4200 region. With this being the case, the market is likely to continue to see a lot of buyers given enough time as we drift lower, as the pullback offers a bit of value in what has been a strong uptrend. That being said, the market of course has a lot of resistance there the 4200 level, which is the top of the longer-term consolidation area that extends all the way down to the 3800 level.

In general, this is a situation where you have to be cautious due to the fact that there is going to be a lot of volatility in general, especially considering that the economic outlook is uncertain at best, and of course risk appetite will probably drift right along with it. If we break down below the 50-Day EMA, then we could see the market drift down to the 200-Day EMA, which of course is an area that a lot of people would be paying close attention to. However, even if we break down below there, it is not necessarily going to be a situation where it enters a downtrend, it probably just opens up the possibility of a move down to the 3800 level. In fact, it’s probably not until we break down below the 3800 level that you can say a major downtrend has started. In other words, we may have already gotten into some type of range for the foreseeable future.

Typically, stock markets are a bit quiet during the summer, so it all comes together quite nicely. That being said, if we were to turn around and take out the 4200 level handily, then it’s likely that we will see the market go look into the 4300 level, but that’s going to take a significant amount of momentum to make that happen. At this point, I think we are just floundering and looking for some type of clarity.

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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