S&P 500 Price Forecast – Stock Markets Bounce From 50 day EMA

The S&P 500 has fallen a bit during the course of the trading session on Friday to reach down towards the 50 day EMA where it found plenty of support that being said, it should be noted that Friday was quadruple witching, meaning that there would have been a lot of volatility in the market regardless. Ultimately, this is a market that is in the consolidation phase still, and therefore there is not a lot of momentum. This is a simple choppy situation that will probably run until the end of the year.

S&P 500 Video 20.12.21

That being said, there is also the possibility of a “Santa Claus rally”, which is when money managers chase returns into the year-end. If we do in fact see that, it is likely that we will see this market resource the highs again. The S&P 500 of course has outperformed most other assets during the course of the year, and it does suggest that we are going to continue to see plenty of value hunting. If we do break down below the 50 day EMA, the next major support level will be found near the 4500 level.

The Federal Reserve did suggest that it was going to start tightening monetary policy much quicker than originally thought, but at the end of the day it seems as if the bond market does not believe them. Because of this, the real battle will begin next year to determine whether or not the Fed can do anything aggressive like they had suggested, or if it is all smoke and mirrors as per usual. Ultimately, you do not short US indices for any significant amount of time. Underneath the 4500 level might be willing to buy puts, but that is about it.

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