S&P 500 Price Forecast – Stock markets recover after initial selling

The Globex session for the E-mini S&P 500 rose a bit rough during the day on Friday, as we continue to hear a lot of negative chatter out of China. However, it looks as if we are recovering quite nicely during the US session.
Christopher Lewis
S&P 500 daily chart, May 20, 2019

The S&P 500 got rattled a bit overnight in the Globex session as the Chinese were somewhat negative in their assessment of the US/China trade policy. At this point though, it looks as if the 50 day EMA is in fact trying to hold, and that of course is a bullish sign. If we can take up to 2900 level that would be extraordinarily bullish and send this market much higher. That being said, it looks as if the buyers are truly trying to take hold of this market, as the last several sessions have seen this market recover after initial drops.

S&P 500 Video 20.05.19

The headwinds above are great obviously, but one feels that it’s only a matter time before we get some type of resolution, be it good or bad. The resiliency of the uptrend cannot be understated, so you should keep that in mind as well. This market continues to impress me every time it dips, there seems to be buyers willing to step in. That being the case, I believe that it’s only a matter of time before the buyers overwhelm or get fooled. All things being equal, this is a very emotional market so they are very difficult to deal with. A simple headline or a tweet could throw this thing into disarray so by all means I would keep your position size very small. All things being equal, if we were to break down below the 2800 level it would be extraordinarily negative, perhaps unwinding the entire uptrend.

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