S&P 500 Weekly Price Forecast – Stock markets roll over

The S&P 500 rallied initially during the week but has ran into a bit of a brick wall near the 2950 level. This is a sign that we can’t take off to the upside very easily. Because of this, I think it’s very likely that we continue to see downward pressure.
Christopher Lewis
S&P 500 weekly chart, August 26, 2019

The S&P 500 has initially tried to rally during the week but found enough resistance at the 2950 level to turn around and fall rather hard. At this point, the market looks as if it is ready to go much lower, perhaps reaching down towards the bottom of the hammers from the two previous weeks. At this point, the market looks very unlikely to be able to rally significantly, as we simply continue to fail. However, those hammers of course offer a lot of support, so paying attention to the 2800 level is probably what we need to do in order to get clarity. If we break down through that level, the market breaks down rather significantly in my estimation.

S&P 500 Video 26.08.19

The alternate scenario is that we break above the 2950 level and that opens up the door to the all-time highs. I don’t think that’s as likely in the short term, but anything’s possible at this point. Jerome Powell did not excite the markets with his speech, so I think that continues to be a major headway in. All things being equal, one thing that should be paid attention to is that we have run out of momentum over the last several months, and that is something that needs to be understood. Sometimes technical analysis works out based upon the candlestick pattern or a flag pattern, but other times it starts to pay attention more to momentum. Momentum is waning, and that’s not good luck.

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