S&P 500 Price Forecast – Stock Markets Smash Into Major Level

The S&P 500 has rallied significantly during the trading session on Tuesday, breaking through the psychologically and structurally important 3000 level. Ultimately, this is a market that I think continues to see a lot of noise in this area, and it will be quite interesting to see whether or not we break back down below the 3000 level. So far, it looks like the market is perfectly content with a buying into the latest rumors of vaccine trials, and then selling off when reality comes back in. This is going to continue to be an extraordinarily choppy and violent type of situation.

S&P 500 Video 27.05.20

The hammer from the Monday session is of course a very bullish sign, so if we were to break down below there it would change the entire attitude of the markets. I think at this point it is obvious that the FOMO traders have taken over, but there is a lot of order flow between here and 3100, so moves higher will be difficult. If we were to break down below that hammer, then it is likely that the S&P 500 will continue to go down towards the 8000 region. The 50 day EMA underneath is starting to turn higher, but also should be supportive. At this point, if the market breaks down, then that would be the first initial target. Ultimately, this is a market that has divorced itself from economic reality, showing the frustration of traders to follow anything but technical analysis as markets and economies are two totally different things.

For a look at all of today’s economic events, check out our economic calendar.