S&P 500 Price Forecast – Stock Markets Pull Back Heading into Weekend

The S&P 500 pulled back during the trading session on Friday as we continue to see the stimulus talks in the United States go on forever. At this point in time, the market is likely to see a significant move based one way or the other on stimulus as it is essentially what Wall Street is waiting on. As we head into the weekend, it seems as if there is no budgeting between Pelosi and McConnell, so at this point in time it looks unlikely that we are going to get any sizable agreement anytime soon.

S&P 500 Video 14.12.20

Looking at this market, the 3600 level should be supportive, not only due to the fact that it is a large, round, psychologically significant figure, but also where we see structural support and of course the 50 day EMA is racing towards that area as well. That being said, soon as we get some type of stimulus agreement, that should be the reason that the S&P 500 takes off. After all, the main driver of the S&P 500 has been the idea of stimulus packages being quite large, especially with Biden Administration officials likely to be very quick to flood the markets with liquidity.

With this being the case, I think it still remains a “buy on the dips” type of situation, but at this point it looks like nobody wants to put on a lot of risk heading into the weekend. Do not be surprised at all if the market has a gap in one direction or the other on Monday. Until then, it is probably best to sit on the sidelines.

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