S&P 500 Price forecast for the week of February 5, 2018, Technical Analysis

The S&P 500 has broken down significantly during the week, slicing below the 2800 level. The 2700 level underneath looks to be very supportive, as it was previously resistive. I believe that as we pull back, there should be plenty of buyers looking to take advantage of value. The 2700 level would be an excellent place to see some type of supportive candle, but you will need to be patient and allow the market to prove itself to you. We have been overbought for some time, and this pullback is not only healthy, but necessary. This is especially true if we are going to go looking towards the 3000 level, which is the year-end target for most people that I speak to in the business. We cannot get there right away, so it makes sense that we would have to have pullbacks so that we can build up the necessary momentum.

If we do break down below the 2700 level, we probably go looking towards the 2600 level after that. That level also looks structurally supportive, and I think it could offer another opportunity if we get that low. Quite frankly, I don’t think that the uptrend is over until we break down below the 2500 level, something that looks very unlikely. The market continues to be bullish even with this pullback, and although we have broken down to close at the very bottom of the candle, longer-term I am looking to buy.

S&P 500 Video 05.02.18