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S&P 500 Price Forecast – stock markets struggle

By:
Christopher Lewis
Updated: Jan 8, 2019, 17:22 UTC

The S&P 500 initially tried to rally during the trading session on Tuesday as the bullish pressure continues in general, but as we approached the major resistance barrier that I have been pointing out on the chart, the market rolled over.

S & P 500 daily chart, January 09, 2019

The S&P 500 has rallied during most of the early hours on Tuesday but have also given up most of the gains as a lot of choppiness continues to be the norm. The 2600 level for me is a major resistance barrier, so we could break above there it could change a lot of things. The Americans and the Chinese are meeting currently, and that is perhaps driving some of the optimism, but the market rolled over quite nastily early in the day, especially the NASDAQ, which drove down many of the other indices.

S&P 500 Video 09.01.19

I think the markets are still very confused and not quite sure what to do and the fact that we have run out of steam during the day tells me that this rally is probably more of the “relief rally” variety than anything else. If we break back down below the 20 day EMA on a daily close, I suspect that we are going to go lower again. However, if we can clear the 2600 level above on a daily close, then that could be thought of as a buying opportunity. Ultimately, this is a market that will continue to be very choppy and skittish with all of the negativity out there and of course the headline risk coming out of places like Washington DC and Beijing. I suspect that we are setting ourselves up for disappointment with the meeting, although initial reports are at least mildly positive. I think using very small positions will be crucial during these extraordinarily volatile times.

About the Author

Being FXEmpire’s analyst since the early days of the website, Chris has over 20 years of experience across various markets and assets – currencies, indices, and commodities. He is a proprietary trader as well trading institutional accounts.

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