S&P 500 Price Forecast – Stock Markets Have Soft Friday

US Stock Market Forecast Video for 27.03.23

S&P 500 Technical Analysis

The S&P 500 has dropped a bit during the trading session on Friday, as we continue to see a lot of noisy trading. When you look at the weekly chart, you can see that we formed a bit of a shooting star, so it shows just how tenuous any rally is. We are currently hanging around the 50-Day EMA and the 200-Day EMA indicators, and both are flat. This tells me that the market is not quite ready to go anywhere, so you have to look at this through a macroeconomic prism.

There are certainly a lot of concerns out there when it comes to the macroeconomics, and therefore I think stock markets are going to struggle to truly take off. They are essentially in a “holding pattern”, waiting for the Federal Reserve to come and bail them out. I don’t think that’s happening anytime soon, and therefore a lot of traders simply have no idea what to do with themselves. This is a problem that the Federal Reserve has created itself, as it has been offering far too much in the way of liquidity for 14 years, and now traders have no idea how to function without cheap money.

Furthermore, we are getting ready to head into the period of time where companies cannot buy back their own stocks, that of course has a negative effect on the market due to the fact that the market is not artificially supported every time it drops. With this being the case, I think you got a situation where the market is probably primed for more of a drop than it is for a rally, and therefore I like the idea of fading short-term rallies as they occur. This will be especially true if we start to see strength in the US dollar, which typically will work against the value of stocks in America.

The 3900 level underneath should be slightly supportive, but I think there’s even more support down at the 3800 level. The 3800 level is an area where we had a bit of a swing low that caused buying last time, so it does make a certain amount of sense that we would at least attempt to get back there.

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