S&P 500 Weekly Price Forecast – Stock markets break out

The S&P 500 has broken to the outside, clearing the top of the consolidation rectangle that I have drawn on the chart. It now looks as if we are ready to go towards the highs again, and as the US and China are speaking again it would make sense that we would have that happen. That being said, I think it is probably going to be very difficult and choppy but if you are a longer-term investor clearly the upside is probably the favored one right now.

S&P 500 Video 09.09.19

To maximize your returns, you should be looking for short-term pullbacks to take advantage of, as it gives you an opportunity to pick up a little bit of value and perhaps give you the ability to avoid some unnecessary drawdown. Ultimately, the 150 point range that we have broken out of should send this market looking towards the 3100 level, which of course is a fresh, new high. That doesn’t mean that it’s going to be easy to get there, and it doesn’t mean that it’s going to happen overnight. That being said though, the Federal Reserve is very likely to do everything they can to let the market as has been the case for a decade now.

Looking at more quantitative easing and loose policies should continue to have traders drive money into stocks, as many of the trading stocks out there offer more of a dividend yield than bonds do. As bond rates continue to drop, that will make some dividend paying stocks more interesting. It appears that people are willing to go “risk on”, at least in the short term.