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S&P 500 Weekly Price Forecast – S&P 500 shows resiliency

The S&P 500 initially dipped much lower during the trading week, reaching as low as the 2300 level. We turned around of form a massive hammer though, which of course is a very bullish sign.
Christopher Lewis
S & P 500 weekly chart, December 31, 2018

The S&P 500 broke down initially during the week, reaching towards the 2300 level. We turned around to form a massive hammer, which of course is a very bullish sign. That sits just below the 2500 level, which of course is a very significant figure. If we can break above the top of the candle, we could then go to the 2600 level. Ultimately, there is a lot of resistance there as it was a scene of significant support. I think this candlestick signifies that we will probably try to rally at the beginning of January and that makes sense because there are a lot of pensions and mutual funds out there that will have to allocate capital for the year.

S&P 500 Video 31.12.18

However, I think the real fight is going to be somewhere near 2650, and if we can break above there I think we have a good chance of rolling over and fall rather drastically. The alternate scenario of course is that we break down through the 2300 level, which opens the door to much lower levels. I think more than likely what we are looking at is a rally that’s probably overdue, and then another selloff as we continue to have a lot of issues out there. Think of it this way: The Federal Reserve backing off may help the market in the short term, but eventually people were going to start to wonder why the Federal Reserve can’t raise interest rates? All things being said though, I believe the next week will probably find buyers.

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