S&P 500 Price Forecast – stock markets pulled back to kick off week

Tuesday was the first trading session for the stock markets as Americans were celebrating Martin Luther King Jr. holiday on Monday. That being the case, it’s likely that a little bit of the exuberance is coming back out of the market as Friday had been such a bullish session.
Christopher Lewis
S&P 500 daily chart, January 23, 2019

The S&P 500 pulled back a bit during the trading session on Tuesday, as the 50 day EMA underneath is offering support, just as the 2600 level is. Because of this, I think it’s only a matter of time before the market turned back around and tries to make a move towards the 2700 level, but I also recognize that there is a lot of noise in this area. Quite frankly, I think it’s probably best to stay out of this market until we get a breakout above the 2700 level, or if we break down below the 2600 level. This 100 point area is going to be very difficult to get a handle on and making things worse is the fact that it’s in the middle of earnings season.

S&P 500 Video 23.01.19

At this point, I think if we break down below the 2600 level, we probably drop another 100 points, if not perhaps lower than that. Ultimately, if the market were to break the 2700 level, then I think the market probably goes to the 2800 level. That’s an area that will be massive resistance, and it would be difficult to break out from there. Overall, this is a market that I think needs to pullback just a little bit to build up momentum, because quite frankly we had rallied so drastically in such a short amount of time. I believe this is a “no touch market” in this 100 point consolidation area.

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