S&P 500 Price Forecast – Stock Markets Looking for Gravity

The S&P 500 has rallied slightly during the open on Monday but continues to see a bit of resistance at the 3200 level. Ultimately though, this is a market that seems to be hell-bent on going back to the highs. Yes, we are overextended but I think what we are going to look at as overdone could lead to a possibility of a value play on dips.

S&P 500 Video 09.06.20

Looking at this chart, the 3000 level would be an obvious support level, just as the 200 day EMA should be which is just below there. I do not have any interest in trying to short this market, but I do look at that as a potential buying opportunity as Wall Street is completely overlooking a lot of things, so you can do is “embrace the stupidity” and follow what the markets are going, regardless of whether or not there is any fundamental reasoning for it. Yes, economies are opening but the reality is that they are not going to be as healthy as they were heading into the virus, so the reality is that stocks are actually more expensive now than they were at 3400, from a P/E ratio.

To the downside, if we were to break down below the 2950 level, then I would consider a move down to 2800 as likely, and a breakdown below the 2800 level would be disastrous. All things being equal though it certainly looks as if we are going to try to go higher and you cannot fight the massive amount of liquidity that is in the market, probably the one thing that helps lift stocks at the moment.

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