S&P 500 Price Forecast – Stock markets gap lower after drone attack

Stock markets kicked off the week rather soft, after the reports of a drone attack on the Saudi oil production refinery complex hit the market. With this, we fell far enough to look for support, and so far it seems like we may have seen it.
Christopher Lewis
S&P 500 daily chart, September 17, 2019

The S&P 500 gapped lower to kick off the week as word got out about the drone attack over the weekend. That of course has people concerned about global growth with high energy costs coming, and therefore it makes sense that the stock markets fell. However, as you know if you read my articles, you know that the S&P 500 has nothing to do with the economy and everything to do with liquidity. The central banks around the world will certainly continue to cut rates, and that will help feed money back into the stock market. At the end of the day, it’s price that matters not economics.

S&P 500 Video 17.09.19

It’s very likely that we will fill the gap and then perhaps try to reach towards the 3030 level, which was the highest recently. A break above there obviously sends more money into the market and allows us to take off to much higher pricing. Pullbacks at this point should have plenty of support based upon the 2980 handle, and that of course the 50 day EMA underneath that is starting to turn to the upside. All things being equal, this is a market that should be bought on dips as it has been rallying for quite some time. Ultimately, I do think that the market will eventually break out but we may have a bit of choppy trading in the meantime to get through as there is so much noise out there.

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