S&P 500 Price Forecast – Stock Markets Nervous Waiting for Powell

The S&P 500 has fallen a bit during the course of the trading session on Friday to reach down towards the 4600 level. The 4600 level also features the 50 day EMA hanging around, as we await the FOMC statement. The rate of tapering is going to be the big question, because if the Federal Reserve starts tapering quite drastically, that could be very negative on the markets.

S&P 500 Video 16.12.21

Nonetheless, if the markets to crash too quickly, the Federal Reserve will step in to save everyone on Wall Street. Inflation of course is something that they are concerned about suddenly, but it is a bit late on that one. The 4500 level underneath would be supportive based upon not only the fact that it is a large, round, psychologically significant figure, and an area where we have seen a little bit of a bounce. At this juncture, it is obvious that the 4700 level above continues offer significant resistance, and if we can break above there then obviously everything changes into more of a “buy-and-hold” type of situation.

All things been equal, this is a market that has been in an uptrend, so I am not necessarily looking to short this market, but I would like to see some type of turnaround to show support. The market breaking down below the 4500 level could essentially set up an opportunity to start buying puts, but I would not step in and short this market by itself. The Federal Reserve will have to walk a tight rope here, so it will be interesting to see what the next 24 hours brings.

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