S&P 500 Price Forecast – Stock Markets Reaching All-Time Highs AgainThe S&P 500 has fallen during the Globex session as Senate may flip over to Democrats. However, then people started focusing on stimulus.
The S&P 500 initially pulled back during the trading session on Wednesday but found enough buying pressure to turn things around. In fact, this was almost as soon as Wall Street woke up, because although the initial reaction to a Democrat-controlled Senate was concern about taxes and business regulation, the switch being flipped over to “stimulus for all” was almost instantaneous. At this point, all you have had to do over the last 13 years trading the S&P 500 is to figure out whether or not money was going to be free and easy. If it is, the S&P 500 goes up. In fact, if you take a look at a chart on the FRED website of the Federal Reserve, if you take a look at the balance sheet of the Federal Reserve and superimpose it with a chart of the S&P 500, it is extraordinarily similar.
S&P 500 Video 07.01.21
In other words, the S&P 500 is in a “post-earnings world”, and therefore macroeconomics have very little to do with what is going on. Beyond that, even company earnings have very little to do with what is going on. After all, we are in a marketplace that has Tesla valued more than the rest of the world’s big automobile companies, even though Tesla sells but a drop in the ocean of vehicles every year. Because of this, it is foolish to try to short this market, even if it has an occasional tantrum. The trend line underneath is your floor, followed by the 50 day EMA, and then the 3600 level.
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For a look at all of today’s economic events, check out our economic calendar.