S&P 500 Price Forecast – Stock Markets Struggle at 2500
The S&P 500 went back and forth during the trading session on Wednesday, reaching towards the crucial 2500 level before pulling back a bit. That of course has a certain amount of psychological importance to it, and a day after there was a massive gain, it’s not a huge surprise to see this market struggle a bit. Furthermore, we are in a downtrend and there’s no two ways about it. That being said, there are lot of questions as to whether or not the downturn is short-lived, or if it is a longer-term structural issue.
S&P 500 Video 26.03.20
At this point, if the market breaks down below the 2400 level, then it’s likely that the market could go down to the 2200 level. Rallies at this point are to be faded until further notice, as the massive bounce that we have seen is of course very bullish but at the same time bear market rallies can be absolutely crushing. Because of this, you can’t get into the market to the downside with both feet, as the “easy money” has already been made. If we do break above the 2500 level, then the next resistance barrier will be 2600, and then eventually the 2750 level. If the market does turnaround for good, it will be based upon the markets realizing that the United States is getting beyond the high point of coronavirus infections. We are not there yet, so although the market will try to front run that move, we aren’t there yet. The Federal Reserve and the U.S. Congress are bailing out the economy so that could help given enough time but in the short term we are still trying to figure out the entirety of the situation. At this point, one would think that there should be a “dead cat bounce”, but generally the bottom gets tested at least once before turning around longer term.
This article was originally posted on FX Empire
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