S&P 500 Price Forecast – 3700 Continues to Hold as Support

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S&P 500 Technical Analysis

The S&P 500 has had a wild ride during the trading session on Wednesday, after initially falling to the 3700 level. The 3700 level has been important for a couple of weeks now, and now it’s likely that it will be the target for sellers. If we can break down below the most recent low, then 3600 gets targeted, followed by 3500. What we are seeing here is a bit of a bear market rally, which does make a certain amount of sense after the massive amount of selling pressure that we had seen.

If we do bounce from here, 4000 should be a barrier that is going to be almost impossible to break above unless there’s some type of fundamental change with the news. Ultimately, I think we have a scenario where breaking down makes more sense, but we may have more of a “fade the rallies” type of setup coming. I do not like buying stock markets right now, because quite frankly there’s nothing good coming through the economic pipeline, and there are a lot of earnings estimates that will have to be written down at this point. However, markets do not go down forever, so a bit of a recovery rally does make quite a bit of sense.

I look at this as an opportunity to get short again, but if we did take out the 4200 level, then you would have to be convinced that the true brand has changed. That is a 400 point move, so it’s not something I’m worried about right now. Ultimately, a recession is coming, and the market is finally starting to price that in.

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This article was originally posted on FX Empire