S&P 500 Price Forecast – Stock Markets Pull Back From Highs

The S&P 500 has pulled back just a bit during the trading session on Tuesday, as traders have come back from the Independence Day holiday weekend and sold off the massive shot higher during the Friday session. This is not to say that we are anywhere near rolling over for a bigger move, just that we may be a little bit extended at this point. The market does tend to move in 200 point increments, so I think we are probably going to target the 4400 level above.

S&P 500 Video 07.07.21

Because of this, the market is likely to see buyers on dips, and I think it is only a matter of time before buyers would pick this market up and continue the overall uptrend. The 50 day EMA underneath is currently sitting just below the 4200 level, so I think that is your temporary “floor the market.” The uptrend line underneath also offers support, so it is not until we break through both of those that I think we are in for a bit of trouble. Underneath, the 4000 level of course also offer significant support, not only from a psychological standpoint but the fact that we also have a gap there that has yet to be filled.

Breaking down below the 4000 level would open up the possibility of buying puts, but we all know that the Federal Reserve will step into the market and protect everybody if we start falling too quickly. Because of this, I never short US indices, and if you look at a history of the last 13 years you can easily see why.

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