S&P 500 Forecast – Stocks Continue to Attract Inflows

US Stock Market Forecast Video for 16.11.23

S&P 500 Technical Analysis

The S&P 500 rose overnight, as traders continue to bet that the Federal Reserve is done raising rates. This was spurred on by the CPI numbers missing by 0.1% during the previous session. This was the opportunity to look for the idea of lower interest rates, or at least no more interest rate hikes. This only proves that stocks no longer have anything to do with the economy, but only to do with the flow of cheap money, a distortion that the Fed has facilitated since the Great Financial Crisis.

The breakout suggests that at least until the end of the year, Wall Street will try to push this market higher. Having said that, the markets are running on momentum, and momentum is a major driver of price in times like this. Because of this, it is impossible to fight this kind of move, and I believe that we very well could see a fresh, new, high in this market soon.

Having said that, I have no interest in shorting this market in the current market environment. This isn’t to say that I am interested in chasing this market, rather I believe that a “buy on the dip” attitude in this situation. The market will continue to chase performance, and a lot of traders have now been caught offside. This could cause a bit of a “melt up” into the end of the year. Ironically, this is a situation that the market rising the way it did could cause people to feel better about the economy, thereby starting to buy more and more, driving inflation back up, and therefore putting the Fed in play again. (We will see.)

At this point, it looks like the 4400 level underneath is support, along with the previous downtrend line that made up the top of the channel that we had been trading in for some time. This could also be backed up by the 50-Day EMA that sits just below, which of course is an indicator that a lot of people will be paying attention to. If we were to break below there, it could change things, but at the moment it doesn’t look likely to happen.

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