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

The stock market initially dipped a bit during the trading session on Tuesday, and then shot towards the upside. At this point, the market is very likely to continue to show volatility, but quite frankly we have broken through a couple of major trendlines.
Christopher Lewis
S&P 500 daily chart, June 05, 2019

The S&P 500 pulled back just a little bit during the trading session on Tuesday, but then shot towards the 200 day EMA. At this point, it’s obvious that the 2800 level above should be resistance as well, as it was previous support. At this point in time it looks like fading the rally could work, but if we were to get a daily close above the 2800 level, then we could go to the upside. At this point in time, it’s very likely that signs of exhaustion could send this market back down to the 2750 handle, and then perhaps the 2700 level.

S&P 500 Video 05.06.19

So far this has been a significant pullback, but I can’t imagine that the market can be characterized as a “meltdown.” This is a market that is starting to come to grips with the US/China situation, trade tariffs, and of course a slowing of global growth. To the downside, I believe the 2700 level will be massively supportive, so if we were to break down below there it could open up the floodgates to much lower pricing.

Keep in mind that it is a market that is highly sensitive to headlines right now, as counterbalancing the idea of all of the negativity is the possibility of the Federal Reserve cutting interest rates in bailing out Wall Street yet again. The question now is whether or not that can actually help longer-term, as those quantitative easing measures seem to have a lessening effect on the stock market.

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