S&P 500 Price Forecast – Stock Markets Pullback to Kick Off the Week

The S&P 500 broke down a bit during the course of the trading session on Monday to reach down towards the 3400 level. Ultimately, this is an area that is important due to the fact that it has been previous support and resistance, and now we are retesting the most recent break out. I think it is only a matter of time before we rally, due to the fact that the 50 day EMA sits just below there, and that of course the uptrend line after that. All things being equal, this is a market that should continue to go higher and therefore you should be looking for buying opportunities.

S&P 500 Video 27.10.20

Remember, you should never short indices because they are not designed to fall. Yes, they cannot fall but it is always a short-term event because they are not equally weighted. They are products that people sell you in order to take advantage of an ETF market. The equally weighted index looks a lot different, but that is obviously not the one most people trade. This is an easier way to play the overall health of the market because only five or six stocks matter. The rest of them are simply irrelevant. Looking at this chart, it is only a matter of time before we find some excuse to go higher but between now and the election it is very difficult to imagine a scenario where we simply jump into the marketplace and take off straight up in the air without some type of resolution to the presidential situation.

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