S&P 500 Forecast – Stock Markets Continue to Consolidate

US Stock Market Forecast Video for 26.10.23

S&P 500 Technical Analysis

The S&P 500 went back and forth during the early hours on Wednesday, as we continue to consolidate through the Q3 earnings season. All things being equal, this is a situation where I think you would expect to see a lot of hesitation near the 50% Fibonacci level as support, but we also have the 200-Day EMA above offering resistance. All things being equal, this is a market that I think continues to see a lot of noise, and therefore a lot of choppiness.

The S&P 500 of course will have to deal with the plethora of issues around the world, not just at home. While earning season obviously causes a lot of volatility, you need to keep an eye on things like interest rates coming out of the 10 year Note. They are still extraordinarily high, and that could cause some problems for companies. However, as long as they stay somewhat stable, companies can turn things around. However, geopolitical tensions obviously cause a lot of issues as well, something that is far beyond the control of any of the companies in the S&P 500. It’s also worth noting that Microsoft and Google had divergent reactions after their earnings calls, and they of course are major influences on this index.

If we can break back above the 200-Day EMA, then the market could go looking to the 50-Day EMA above. We recently have made a “lower low”, so it does suggest that perhaps we could see more downward pressure. If we were to break down below the Monday candlestick, then the market is likely to go looking to the 61.8% Fibonacci level underneath. With this, the market is likely to continue to focus on a lot of interest-rate pressures and of course concerns about a widening conflict in the Middle East.

It’s typical to be very choppy during earning season, so I think at this point it makes sense that we continue to see a lot of volatility. With this being the case, you will have to be very cautious with your position sizing and perhaps focus more or less on short-term charts.

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