S&P 500 Price Forecast – Trying to recover

The S&P 500 try to recover a bit during the trading session on Thursday, reaching towards the 2800 level rather quickly. This is an acute surprise, as these round numbers tend to be magnetic. Beyond that, the 200 day EMA is sitting just below.
Christopher Lewis
S&P 500 daily chart, May 31, 2019

The S&P 500 continues to grind back and forth, reaching towards the 200 day EMA early in the session only to reach back towards the 2800 level as the Americans came aboard. The question now is whether or not the rally can hold. I don’t think it dollars, but we could go as high as 2815 before massive selling comes back into the picture. Obviously, the market attitude has changed in general, but the 200 day EMA will catch a lot of attention. I am willing to accept the fact that a break above the 2820 level could send this market higher, but right now my face case scenario is that this is a rally that will offer a selling opportunity either later in the day or perhaps early next week.

S&P 500 Video 31.05.19

To the downside, I believe that we are going to go looking towards the 2750 level, perhaps even the 2700 level. Keep in mind that the US/China trade wars only getting worse, so I anticipate that it’s only a matter of time before the accumulation of minor bad news continues to weigh upon the market enough that something snaps. Bond yields continue to fall as people are buying treasuries, and then of course works against the value of stocks as well as it shows a leaving of equities. I think at this point the stock markets ability to rally is tenuous at best, so I’m looking front signs of weakness to take advantage of. Patience is crucial in trading, especially if you’re trying to short something.

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