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S&P 500 Price Forecast – Stock Markets Pulled Back Slightly

By:
Christopher Lewis
Published: Oct 13, 2020, 15:45 UTC

The S&P 500 has pulled back a bit during the trading session on Tuesday, as we have gotten a bit ahead of ourselves.

S&P 500

The S&P 500 is likely to pull back a bit due to the fact that we had gotten a bit parabolic. People are starting to get way ahead of the reality when it comes to fiscal stimulus, and I think we are starting to see that play out during the day. This is not to say that the S&P 500 should fall, just that it is overdone. At the very least, the market probably needs to go sideways but I prefer the idea of finding this market at lower levels. The ultimate support at this point is the 3400 level, not only due to the fact that it was where we broke out, but it is also where the 50 day EMA is getting ready to cross.

S&P 500 Video 14.10.20

If we do rally from here, the 3580 level will be significant resistance, and breaking above there would have this market suddenly become extraordinarily parabolic, which of course is a very dangerous thing. Because of this, I would be very cautious at that point as well, it would simply wait for an opportunity to buy it on a dip. In other words, it is the same play regardless.

I am looking for value in a market that has most certainly seen a lot of bullish pressure due to the idea that Wall Street will get bailed out yet again. As far shorting is concerned, I do not really like doing that with this index because it is so highly manipulated as it is not an equal weighted situation.

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

About the Author

Being FXEmpire’s analyst since the early days of the website, Chris has over 20 years of experience across various markets and assets – currencies, indices, and commodities. He is a proprietary trader as well trading institutional accounts.

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