S&P 500 Weekly Price Forecast – Stock markets continue to show signs of support

The S&P 500 broke down during the week but has shown a bit of resiliency just below the 3000 level. Ultimately, this is a market that looks to be going higher, and the strength overall should continue due to the central bank actions.
Christopher Lewis
S&P 500 weekly chart, July 22, 2019

The S&P 500 has broken down significantly during the week, slicing through the 3000 handle. We have turned around to show signs of strength though, and we have ended up forming a hammer. The hammer of course is a bullish sign, so it suggests that we are going to go higher given enough time. The gap underneath is going to cause a bit of support, so if the 2950 level gets broken that would be a very negative sign, and then we could break down towards the 2900 level. That being said, it looks very likely that we are going to continue to go higher though, based upon the resiliency of what we are seeing.

S&P 500 Video 22.07.19

With the Federal Reserve looking to cut interest rates, traders are looking to buy stock, as it is more of a “risk on” move. That doesn’t necessarily mean that it’s a safe bet, just where the momentum is. Beyond that, we have been in and uptrend for some time, so obviously it’s hard to turn that type of move around. I do think that we go looking towards the 3050 but given enough time we probably go even higher than that. After all, we don’t fight the trend, especially when it is this strong. All things being equal, it’s difficult to imagine a scenario where I would be short of this market above that gap. Even if we do break down below the gap, there still are plenty of areas underneath that could pick the situation up.

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