S&P 500 Price Forecast – Stock Markets Give up Early Gains

The S&P 500 has initially rally during the trading session on Wednesday but found enough resistance to turn right back around after Jerome Powell suggested that negative interest rates were not coming. Furthermore, Dr. Fauci suggested that they recovery from the coronavirus is going to take much longer than anticipated. If that is the case, then it makes sense that the economy will probably continue to struggle and therefore stock market should in theory at least look at that reality.

S&P 500 Video 14.05.20

In a sense, the drama and fantasy that is Wall Street is crumbling because negative interest rates would have made more money flow into the stock market. That does not mean it cannot happen, but at least the Federal Reserve is not willing to admit it yet. Furthermore, if the economy stays shut down longer than anticipated, it will continue to put pressure on companies which eventually Wall Street has to pay attention to. Having said that, I am now looking at the 2800 level underneath with great interest, because we can break down below there it is likely that the market goes looking towards the 2640 handle. On the other hand, if we were to break above the top of the candlestick for the Wednesday session, then I will go looking to short this market at the 200 day EMA above. All things being equal it looks as if we are running out of momentum and that of course is something worth paying attention to. One thing I think you can count on is going to be a lot of volatility as the markets continue to weigh a lot of the crosscurrents.