S&P 500 Price Forecast – Stock Markets Continue to Kill Time

The S&P 500 initially pulled back a bit during the trading session on Friday only to turn around and show signs of life again. It looks as if the 3900 level is going to continue to offer short-term support, but quite frankly I think something bigger is at play here. Ultimately, I think we are simply killing time after a massive move to the upside which is one of the two ways you can work off some of the froth. The other one of course is to pull back, so I think either move makes sense, but I would prefer a pullback in order to start buying again.

S&P 500 Video 15.02.21

If I do not get that, then I would distantly be a buyer and hold on for a move to the 4000 level. The 4000 level is of course a large, round, psychologically significant figure that a lot of people will pay close attention to. When you look at the consolidation area between the 3200 level on the bottom and the 3600 level on the top that we recently broken out of, the “measured move” suggests that we are going to the 4000 level based upon the 400 points. Furthermore, we also have the 50 day EMA underneath and the uptrend line both looking very likely to show signs of support near the 3800 level.

I have no interest in shorting this market, because quite frankly the Federal Reserve is going to continue to liquefy markets enough to keep them floating. Furthermore, we also have massive stimulus coming from Congress, and that of course tends to be very good for stocks over the longer run as well.

For a look at all of today’s economic events, check out our economic calendar.