S&P 500 Price Forecast – Stock Markets Start Week On Back Foot

The S&P 500 has pulled back a bit during the trading session on Monday to kick off the week on the back foot. By doing so, this shows that the market is going to continue to chop around in this area, but I do think that it is only a matter of time before the momentum picked back up and we take off to the upside. The main reason I say this is that the most recent lows are much higher than the previous one, and of course we have been in an uptrend for some time. Do not get me wrong, I am not saying is going to be easy but clearly the overall directionality of the market is much more positive than negative. With that in mind, I like buying dips.

S&P 500 Video 01.12.20

As far as dips are concerned, I would anticipate that the 3600 level would be the initial support, followed by the 3500 level. It should also be noted that the 50 day EMA sits just below that 3500 level, so that could become a very interesting place to find value. To the upside, if we can break out to a fresh, new high then it opens up the possibility of a move all the way to the 4000 level based upon the measured move of the rectangle we have just broken out of. With this, I think a lot of it comes down to the US dollar as well, as it has been weakening for some time and therefore it could be a driver for higher equity prices.

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