S&P 500 Weekly Price Forecast – stock markets continue to grind higher

The stock markets in America initially fell during the week, but then turned around and broke out. The S&P 500 of course wasn’t any different, and now that we are above the 2700 level, things get rather interesting.
Christopher Lewis
S&P 500 weekly chart, February 04, 2019

The S&P 500 initially pulled back during the week, reaching down towards the 2625 level, showing signs of support again. What’s even more interesting is that the previous week formed a hammer off the 2600 level, and of course we found the support just above there. This tells me that the market is ready to continue to grind to the upside, unleashing even more inertia to the upside again. With the Federal Reserve on the sidelines, it makes quite a bit of sense that perhaps talks get a bit of a boost as a loose Federal Reserve helps the markets in general.

S&P 500 Video 04.02.19

Although this has been in a massive move to the upside, we still haven’t taken back all of the losses from the beginning of December. The bearish case is that we have not seen volume picked up to the upside, and that of course shows a bit of concern for the buyers. Ultimately, I think that the market is walking the proverbial “wall of worry.” The question now is whether or not we get above 2800? I don’t think we do anytime soon, and the fact that we show bullish pressure doesn’t necessarily mean that we have enough to get past that massive area.

That being the case, I believe that the next few weeks should be bullish, but I also recognize that there is still a major battle to be fought at the 2800 level. I think that this lends itself to be bullish but noisy couple of weeks, meaning that longer-term investors are going to be a bit perplexed. For the longer-term investor, 2800 is going to be the key. We are not in an environment conducive to buying and holding right now.

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