S&P 500 Price Forecast – stock markets rally again on Tuesday, but wait…

The S&P 500 rallied during the trading session on Tuesday, as we had formed a nice-looking hammer from the previous session. However, by midday we started to get back quite a bit of the gains, something that isn’t exactly going to inspire a lot of confidence.
Christopher Lewis
S & P 500 daily chart, December 12, 2018

The S&P 500 rallied a bit during the trading session on Tuesday, reaching towards the 2675 level before pulling back a little bit. I still think there is plenty of support underneath that could lift this market, but obviously it’s not going to be a straight shot up. Alternately, if we were to break down below the bottom of the hammer on Monday, the market will more than likely reach down to the 2500 level rather quickly. There are a whole host of negative headlines out there just waiting to pummel this market, so even if we do rally to the upside, I think it’s only a matter of time before exhaustion comes into the marketplace and makes it able to be shorted.

S&P 500 Video 12.12.18

I think volatility is going to be a major issue going into the end of the year, not only because of the lack of liquidity, but also the lack of certainty. The 50 day EMA is turned lower, although we have been consolidating. Monday was rather negative in the sense that although we found support underneath the 2600 level, we broke below it to begin with, which of course shows that some orders may have been cleared out. All things being equal, it does look like we should continue to bounce, but I think those bounces are going to be somewhat limited as there is so much out there that could cause major issues in the equities markets overall.

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