S&P 500 Weekly Price Forecast – Stock markets crater

The S&P 500 initially tried to rally during the week but then broke down significantly to slice through major support levels. With that being the case, this is a marketplace that looks like it’s on the precipice of something rather ugly.
Christopher Lewis
S&P 500 weekly chart, June 06, 2019

The S&P 500 initially tried to rally during the trading week, but then broke down rather significantly. By breaking through the 2800 level, it’s very likely that the market would go down to the 2750 handle. This is a marketplace that continues to look like it’s under serious threat, and with Donald Trump threatening Mexico now, it brings in more volatility and problems for risk appetite. At this point in time, it’s likely that we will continue to go down to the 2700 level, possibly even the 2600 level. We have seen signs of weakness in the economy recently, and this is just a confirmation of the negativity that has been showing up.

S&P 500 Video 03.06.19

To the upside, it’s not until we break above the top of the weekly candle stick that we just formed that I would be willing to buy this market. The 2900 level above will be a major resistance barrier and perhaps a target if that happens. However, we would need to see some type of walk back of the threats that Trump is making against the Mexicans. Ultimately, this is a market that closed at the bottom of the candle stick at the end of the week, and that of course is a very negative sign. At almost any time that you close that low on the candlestick, it means that we are more than likely going to see a continuation. It’s very difficult to imagine a scenario where this turned around completely and rallies. That being said, bear market rallies can be vicious.

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