S&P 500 Price Forecast – Stock markets facing overhead resistance

The S&P 500 rallied a bit during the Friday session as we reached towards the 2800 level. This is an area that has been massive resistance, so it’ll be interesting to see whether we can clear it. In fact, looking it candlesticks from the past it looks as if the resistance runs all the way to the 2820 handle, so I do not expect to see this market break out in the last couple of hours. If we do get a daily close above 2820, then all bets are off and we probably go to the 2900 level.

S&P 500 Video 25.02.19

At this point, it’s very likely that if we get that surge higher it will be based upon US/China trade talks. We need to see significant agreement between the two parties to have a significant move in my estimation. A simple delay in the tariffs being increased is probably not enough to get this market to break out to the upside, as market participants are assuming this is going to happen from all of my sources. With that being the case, I suspect we probably have more of a case for disappointment than anything else, because although it looks like we are making progress in the US/China trade talks, the central issues that the Americans wished the Chinese to address are structural in nature, and don’t get solved that quick in general.

Looking to the downside, I believe that the 2700 level will be significant support, just as the 2750 level will be. Because of this, I think this is more of a “buy on the dips” scenario just waiting to happen.

Please let us know what you think in the comments below