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S&P 500 Price Forecast – Wall Street Continues to Follow Interest Rates

By:
Christopher Lewis
Published: Jan 18, 2024, 14:18 UTC

Early during the trading session on Thursday, we have seen the S&P 500 slip back into his usual behavior of watching the bond market and looking for “cheap money.”

Wall Street, FX Empire

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US Stock Market Forecast Video for 19-01-2024

S&P 500 Technical Analysis

The S&P 500 rallied a bit during the early hours of Thursday as we continued to consolidate overall. That being said, the market is roughly in the middle of the range in general, and therefore we are essentially fair value, if you could look at it through the prism of just simple back and forth trading, the 4,700 level underneath offers a significant support level, while the 4,800 level above offers a significant resistance level. If we can break above the 4,800 level, then the market could go much higher. And I think sooner or later it probably will.

In that environment, I would anticipate the S&P 500 going to the 4900 level followed quickly by the 5000 level, which is the longer term target at the moment. All of that being said, if we were to break down below the 4700 level, then you start to look at the 50-day EMA as a potential support level, as it is an indicator that is followed by quite a few traders out there. That being said, this is a market that continues to be a play on the Federal Reserve and what they may or may not be doing with interest rates. And as long as that’s the case, you have to keep an eye on those rates. Are they falling? If they are, then the stock market is probably rallying. After all, Wall Street loves cheap money and that’s essentially what’s driven the stock market since the great financial crisis.

I don’t expect that to change anytime soon, and therefore I think this is a market that you continue to jump in and buy dips, finding some type of value. Ultimately, this is a market that given enough time will probably have to make a bigger decision, and it certainly looks as if plenty of buyers are out there willing to lift it any time there is the slightest hint of some type of value being added by prices falling. Because of this, I have absolutely no interest in shorting this market anytime soon.

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

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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