S&P 500 Forecast October 30, 2017, Technical Analysis

The S&P 500 reached towards fresh, new highs during the session on Friday as we had stronger than anticipated GDP numbers coming out of the United States, and then, of course, decent earnings. The market looks like a “buy on the dips” scenario for the short-term traders, but quite frankly I don’t like the fact that we have not had significant pullbacks. The weekly candle is a hammer, and that, of course, is a bullish sign, so I think that if we can stay above the 2550 handle, then we should be reasonably safe. However, if we break down below that level, it’s likely that we will have to reach towards the 2500 level, and perhaps even lower to get long again. I cannot help but feel that the market is overdue for a correction, and I think we should get that sooner rather than later. However, if I were to place a trade, it must be to the upside.

S&P 500 Video 30.10.17

Shorting is all but impossible, so it’s just a matter of picking up value when it presents itself. The overall trend obviously is to the upside, so it’s certainly likely that we will continue to grind to the upside, but I think that patience will be needed as we have gotten ahead of ourselves. If we do breakout to the upside and above the 2600 level, the market should continue to go even higher, but I think that breaking above the 2600 level immediately would be difficult. We need to pull back so the people feel more comfortable in buying stocks, as they have guns overextended. At this point, we are in danger of a “blow off top”, which I certainly do not want to see as the uptrend has been so reliable.