S&P 500 Price Forecast – Stock Markets Have Wild Ride on Friday

The S&P 500 broke down significantly again during the trading session on Friday, showing signs of stability midday. Having said that, the market is extraordinarily oversold, and we have just seen one of the worst selloffs ever. At this point, the market is likely to see a hard bounce, but that bounce may or may not be sustainable. Quite frankly, I don’t think it’s likely to happen. The 200 day EMA above will more than likely offer resistance, and it’s not until we clear that level on a daily close then I think the market can truly bounce.

S&P 500 Video 02.03.20

The weekend can bring anything, not the least of which would be central banks deciding to cut rates or do something to help markets. That being said though, it can only help so much and at this point I think that the markets are probably resigned to sell rallies in the short term, at least until the coronavirus disappears or at least gets under control before the market can truly gain for a longer-term move. To the downside, if we were to break down below the lows of the Friday session this could really start to unwind things in cause a lot of problems. At this point, I don’t see an argument to start buying, at least not without some type of major help from outside. Overall, this is a market that if you try to bite here you might be “catching a falling knife.” Any bounce later in the day could be simple short covering than anything else. At this point, the sellers are still very much in control.