S&P 500 Weekly Price Forecast – stock markets rally to close out the week

The S&P 500 rallied significantly during the week, forming a very bullish candle. The 2700 level above is resistance, as it is the top of the shooting star from several candles ago. If we break that level, then there’s really nothing stopping the market going to the 2800 level. Pullbacks at this point should have plenty of support though, especially near the 2600 level. The breakout is very strong, but the one thing that I am a bit concerned about is a lack of volume. At this point though, I think there will be a lot of money willing to come into the market and chase it, because quite frankly most people missed this move.

S&P 500 Video 21.01.19

If we were to break down below the 2600 level, that would be very negative and could send this market much lower. However, my experience has been that if you can break above the 61.8% Fibonacci retracement level, which we most certainly have, you typically will retake the entirety of the move and go back to the 100% Fibonacci retracement level. With that in mind, I do believe that the buyers firmly have the upper hand and with the Federal Reserve stepping away and being a lot less likely to raise interest rates, this of course has injected the “monetary morphine” that the markets have thrived on for 10 years now. Looking at this chart, I think we have some volatile weeks ahead of us but it certainly looks as if the buyers are in control again.