S&P 500 Price Forecast – Stocks Continues to Look for Momentum

US Stock Market Forecast Video for 03.10.23

S&P 500 Technical Analysis

The S&P 500 experienced a failure during the early hours of Monday’s trading session, reflecting the anticipation surrounding the US government signing a continuing resolution to keep the government open. However, as the day progressed, selling pressure mounted, injecting an element of negative momentum into the market. This downturn is not limited to stocks alone, as numerous asset classes have witnessed significant reversals. The underlying issue appears to be a widespread reluctance to put risk on, which is expected to persist.

One key level to monitor is the 4200 mark, which holds substantial long-term support significance. Should the index breach this level, it could potentially trigger a cascade of selling, potentially leading to a test of the 4000 level. The specter of interest rates looms large, contributing to the prevailing market unease. This concern is unlikely to dissipate anytime soon, adding to the market’s overall trepidation.

The sentiment towards equities, at present, is far from favorable. Investors and traders alike are approaching this market with caution, given the impending uncertainties, especially in the bond market. It is increasingly evident that we are on the precipice of a potentially turbulent period. Nonetheless, it is essential to note that the end of the month often witnesses portfolio rebalancing, so this is a major factor in the nastiness that we have seen on Friday, and this could have played a role in the day’s market dynamics.

In the end, the prevailing market conditions are characterized by extreme caution, and risk aversion remains a dominant theme. The S&P 500 is navigating through a challenging landscape, with the 4200 level acting as a crucial support. The possibility of a breakdown below this level raises concerns of further downside potential, with 4000 being the next significant support zone. The lingering impact of interest rates continues to cast a shadow over the market, further exacerbating the sense of uncertainty.

Investors and traders are advised to exercise prudence and carefully consider their position sizing. The current market environment demands a nimble approach to navigate the challenges ahead. As we move forward, the 200-Day EMA remains a point of interest, suggesting that the market is still in the midst of a complex battle for stability.

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