S&P 500 Weekly Price Forecast – Stock markets show resiliency during the week

Stock markets broke down rather significantly during the week but have found quite a bit of support to turn things around of form a hammer candle in several the indices that I follow.
Christopher Lewis
S&P 500 weekly chart, August 12, 2019

The S&P 500 broke down during the week, as we continue to see a lot of concerns around the world when it comes to global growth and trade tensions. By breaking down below the 2800 level, and at this point the markets have turned around of form a hammer. The hammer of course is a very bullish sign, so at this point it looks very likely that the market may make a run towards the 3000 level above. At this point, the market could break above the recent candlesticks that have caused quite a bit of resistance, and then send this market towards the 3050 handle, perhaps even the 3100 level.

S&P 500 Video 12.08.19

At this point though, if we were to break down below the hammer, the market may go looking towards the 2750 level, and then the 2700 level. I think that the market is in a nice uptrend and it should continue to be the case going forward. Ultimately, until we break down below the bottom of the candle stick it’s hard to have a scenario where I’m a seller longer-term. All things being equal though, I would point out that the stock markets have a lot to digest, but the only thing that really matters is whether or not the Federal Reserve is going to continue to throw cheap money out there. If they do, it’s very likely that we will continue to see higher pricing. Volatility is about to pick up as well, as we start to get closer toward September which is historically when a lot of traders come back to work.

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