S&P 500 Price Forecast – Stock Markets Continue to Trade in a Tight Range

US Stock Market Forecast Video for 12.05.23

S&P 500 Technical Analysis

The S&P 500 has gone back and forth during the trading session on Thursday as we continue to see a lot of sideways action in general. CPI and PPI numbers in the United States came out a little cooler than anticipated over the last couple of days, and therefore it makes sense that we would see mixed messages because the argument is twofold at the moment. The cooling inflation numbers give traders hope that the Federal Reserve could start to think about loosing monetary policy, but there’s also the concern that the economy is going to slow down, and that, of course, is bad for earnings.

Ironically, the fact that traders want the Federal Reserve to loosen monetary policy and boost stock prices might actually occur, but not for good reasons. After all, any situation that the Federal Reserve feels they need to support the market would not be a good thing considering that it would show the economy needs help, so it’s a question of “be careful of what you wish for.”

Another thing to pay attention to is the fact that we have a megaphone pattern that could possibly be forming, which typically is a sign of massive volatility that ends up shaking the markets apart. Whether or not it is a reversal signal remains to be seen, but it’s something that you need to keep in the back your mind. At the same time, you can also make an argument that the 50-Day EMA underneath could offer a significant amount of support, so it’s worth paying close attention to. Breaking below the 50-Day EMA opens up the possibility of a move down to the 200-Day EMA, which is sitting at roughly 4050. Under there, then you have the 4000 level which obviously has a lot of psychology attached to it.

On the upside, breaking above the 4200 level opens up the possibility of a move to the 4300 level, which is an area where we have seen significant selling pressure in the past. In the short term, it’s probably going to continue to be very choppy and sideways action.

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