S&P 500 Weekly Price Forecast – Stock markets continue to show resiliency

The S&P 500 spent most of the week falling but has turned around quite nicely on both Thursday and Friday to form a massive hammer. The hammer not only looks strong, but it is supported by the 50 week EMA and of course the uptrend line just below.
Christopher Lewis
S&P 500 weekly chart, October 07, 2019

The S&P 500 has pulled back during most of the week but found the last couple of days somewhat supportive. With that being the case it’s likely that the market will continue to test the market to the upside, and recently people had begun to worry about a potential “double top”, which of course is still in effect. That being said though, it certainly looks as if the market will try to test the highs again so I do like the idea of buying the S&P 500 on short-term dips. Longer-term, this is simply been a “buy-and-hold” market since the beginning of the year, and even though this most recent high left a lot to be desired, it still technically is.

S&P 500 Video 07.10.19

To the downside, if we break down below the 50 week EMA on a weekly close, then you can start to talk about more negativity creeping into the market. With the Federal Reserve likely to cut interest rates, and of course the jobs being somewhat decent, it allows the stock market to run higher over the longer-term as they feel like they have a bit of a “Powell Put” behind them. Ultimately, this market will probably go looking towards the top of the channel, which means we could be looking at the 3100 level given enough time. This doesn’t mean that it will happen quickly, but it certainly looks as if the momentum of the market still continues to look and that overall direction.

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