S&P 500 Forecast: Has Massive Turnaround

It’s possible that something as simple as people “thinking” that inflation is getting close to peaking caused the market to lose its mind. That being said, we may have a little bit of follow-through going forward, but I would not necessarily bank on that. I suspect it is probably going to be a trend change, and as we start to head into the earning season, it’s likely that we will see quite a bit of volatility. After all, there are a lot of minefields out there that we will have to look through, especially as a lot of CEOs have already stated that the outlook is not good. Because of this, I think we have a situation where we will eventually find selling pressure, perhaps closer to the 3800 level, but it most certainly will be there.

If we break down below the bottom of the candlestick, that could kick off a major drop, perhaps down to the 3500 level. Breaking below the 3500 level essentially unleashes something akin to Armageddon for the stock market. On the other hand, if we were to turn on a break above the 3800 level, then it’s possible that we could go higher, as the 50-Day EMA is going to be a major barrier and is also what I think will be the ceiling in the market.

I don’t know that we get there, but if we do that could change everything. Breaking above that would be a very bullish sign, although it’s very unlikely one at this point. I believe given enough time, we will continue to see volatility, but hope burns internal on Wall Street, so it looks like we are going to get another bull trap building up over the next several session. Also, keep an eye on how we close on Friday because it will tell you how people really feel as they decide whether or not to hold onto stocks heading into the weekend.

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