S&P 500 Price Forecast – Stocks Slide in Electronic Overnight Session

S&P 500 Technical Analysis

You can see Tuesday has gotten off on the wrong foot. It looks like we are going to perhaps be somewhat calm between now and the Federal Reserve meeting. It makes perfect sense because that’s typically a very volatile time of the month. Ultimately, a pullback at this point in time should end up being a buying opportunity and I do think that the 5,100 level is an area that a lot of people will be paying close attention to. It should be support and then after that, we have the 5,000 level, which is not only a large, round figure that has a lot of psychology attached to it, but it also has the 50-day EMA sitting there. So that being said, I am hoping for a little bit of a pullback here that I can take advantage of.

The Federal Reserve is set to cut rates later this year, and that’s the expectation everybody is trading on. That’s part of why we’ve gone straight up in the air in this perfect channel. The question now is, when do they cut them? There has been a moving narrative, if you will, on Wall Street as to when it happened, but their consensus is still that 75 basis points are cut between now and the end of the year. There are some signs of cracks in the economy, but ironically, that might be the best thing for the stock market.

After all, it means that the Federal Reserve could cut quicker. In the United States, we have a situation where inflation is still running a bit hot, but at the same time, you’re starting to see stores close and some signs of issues in all of the revised employment numbers. So, it all comes together for a quite messy picture. And I think that might characterize trading later this year. But as things stand right now, it’s very much a buy on the dip market.

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