S&P 500 Price Forecast – Stock Markets Pull Back Ahead of Holidays

The S&P 500 has pulled back just a bit during the trading session on Friday, as we head towards the Christmas holidays. Ultimately, this is a simple profit-taking exercise as traders will be looking to lock in profits heading into the new year. Beyond that, it was also a “quadruple witching” session, as well as the day that Tesla gets added to the index. In other words, a lot of volatility would have been expected and it is very likely that a lot of professional trader simply would have just stepped away.

S&P 500 Video 21.12.20

To the downside I see the 3600 level offering significant support, right along with the 50 day EMA that sits just underneath it, so having said that I think it is only a matter of time before we have to be buyers of this market. To the upside, the 3800 level makes a nice target, and I do think that we get there sometime over the next several weeks. That being said, we are about to go through the holiday, so I do not necessarily think it happens in the next few sessions. Expect very light and choppy trading, unless of course we get that stimulus package in an inset being better than anticipated over the weekend. As I write this, they are looking very likely to get it done, but the final details of course are still a little bit of a sticking point. At this point, this is a “buy on the dips” type of market still and nothing has changed as far as that is concerned.

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