S&P 500 Price Forecast – Stock Markets Running Into Major Resistance

The US stock markets have rallied quite nicely over the last couple of weeks, but now they face significant resistance above, in the form of what is basically the all-time highs. At this point, it makes quite a bit of sense to see sluggish action.
Christopher Lewis
S&P 500 daily chart, October 18, 2019

The S&P 500 has rallied early during the trading session on Thursday as we continue to see bullish pressure. Part of the exuberance was due to the United Kingdom and the EU coming to terms with some type of deal for Brexit, but Parliament will need to pass that deal, something that isn’t necessarily guaranteed. Thank gave back some of the gains, but ultimately it looks as if the 3000 handle has been broken. The question now is “What about the other 22 points?” That’s how far we have to break out to the upside. That’s a pretty significant move for one day, not that it can’t be done but obviously you need some type of catalyst.

S&P 500 Video 18.10.19

It’s more likely than not that we will see some type of negativity creep into the marketplace, and make this market pull back. That being said, it’s not a sell signal but rather a signal to start looking for value at lower levels. All things being equal we are still very much in and uptrend and I do not wish to fight that. It looks very much like a market that will eventually break out to a fresh, new highs, and once it does it will have a significant amount of inertia built up. In the short term, I like the idea of looking for buying opportunities closer to the 2950 level, which is basically the same thing as the 50 day EMA. Any type of hammer in that region would be interesting to me. Obviously though, if we did break out and make fresh, new highs, then I have to be a buyer.

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