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S&P 500 Price Forecast – Stock markets quiet on Tuesday

Stock markets were rather quiet during the trading session on Tuesday as we continue to test the 50 day EMA. It’s very precarious at this point, and it looks as if we may be running into quite a bit of trouble. That being said, traders are awaiting a slew of central bankers this week.
Christopher Lewis
S&P 500 daily chart, August 21, 2019

The S&P 500 went back and forth during the trading session on Tuesday, dancing just below the 50 day EMA. By doing so, this is a market that looks very likely to continue struggling all things being equal. I believe that the 2950 level above is going to continue to cause quite a bit of resistance, so we were to break above there it would be an extraordinarily bullish sign. At that point, I would anticipate that the market is probably going to go to the 3000 handle.

S&P 500 Video 21.08.19

Looking at this chart, we could drop down towards the 2850 handle, which has been supportive as of late. Ultimately, I believe that the market continues to find this area comfortable, but it’s only a matter time before we have to make some type of decision for a longer-term move. Once we do, it should be a big move. To the downside, the 2750 level would cause quite a bit of support and breaking through there could be a very negative turn of events leading into a bit of a bear market.

Another thing that concerns me is that the bond markets have found quite a bit of a bid as of late, and therefore bond traders don’t like the idea of taking on risk at this point either, as they continue to buy paper. That of course is a negative sign as well. That being said, if we break 2950 it will be bullish and simply a sign that we are going to pick up another 50 points.

Please let us know what you think in the comments below

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