S&P 500 Weekly Price Forecast – Continue to Rally Based Upon Stimulus

The S&P 500 has rallied rather significantly during the course of the week, breaking clearly and cleanly above the 3400 level like it was not even there. At this point, the market is moving on the idea of more stimulus coming, come hell or high water. With that, it looks like this is a “one-way trade” again, and therefore it is likely that we will see a lot of volatility going forward and short-term pullback should end up being buying opportunities, assuming that the Congress does some type of fiscal package, or perhaps the Federal Reserve steps in.

S&P 500 Video 12.10.20

For what it is worth, politicians have been stating that they believe they stimulus package will happen, and they all agree on that, but they still have to get their pre-election bickering out of the way. With that being the case, I think that the market is trying to front run what is happening, which could lead to a bit of a “sell the news” type of event, but I do not necessarily think that will be a longer-term pullback. Look at any knee-jerk reaction to the downside as a potential buying opportunity, so therefore you may have to jump down to shorter time frame charts in order to take advantage of potential setups.

At this point, the 3200 level has now become the “long-term floor” in the market, with the 3400 level offering support. I believe that we will hit the all-time highs again, because quite frankly that is all this market does, move on more stimulus and cheap money. That has been the case for over 12 years, I do not see that changing anytime soon.

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