S&P 500 Price Forecast – Market Pullback Again on Tuesday

S&P 500 Technical Analysis

The S&P 500 fell a bit during the Tuesday session as we try to correct an overstretched move. The 4500 level looks like it’s probably going to be a little difficult to overcome, and quite frankly you cannot go straight up in the air forever so this does make a certain amount of sense. With that being the case, the market will continue to see a lot of noise, but I think we can fall all the way back down to the 4300 level and still find buyers.

We are starting to get close to the so-called “blackout period” when companies cannot buy back their stocks due to pre-reporting time frames. In other words, there will be a certain amount of liquidity withdrawn from the markets as a result. I think ultimately, we do find buyers underneath because Wall Street always has a bullish narrative to follow. The market will continue to be extraordinarily noisy, and therefore I think you are starting to see people take a significant amount of caution ahead of all of this noise. It does make a certain amount of sense that we would see profit-taking in this environment.

On the other hand, if the market were to turn around and take out the highs again, then it will continue to see more of a “FOMO trade” going forward. I do think that the S&P 500 is overdone, and a correction is probably good because quite frankly you have to ask the question “Exactly who is left to start buying again?)

The 50-Day EMA is racing toward the markets but still remains below the 4300 level. Ultimately, this is a market that I think will continue to look at the 50-Day EMA as a potential dynamic support level. Quite frankly, the market is almost impossible to short at this point, due to the fact that there has been so much in the way of upward momentum, it’s just not worth the hassle to get short on the index itself, but there are plenty of individual names that are doing relatively poorly. Remember, the S&P 500 is being thrown around by a handful of stocks at this point.

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