S&P 500 Price Forecast – Stock Markets Sit Just Above 200-Day EMA

US Stock Market Forecast Video for 28.09.23

S&P 500 Technical Analysis

The S&P 500 has been relatively quiet during the early hours on Wednesday, as we continue to see a lot of noise in the markets. That being said, it looks like we are trying to stabilize just above the 200-Day EMA, which sits just below the 4300 level. The stock market of course has to deal with higher interest rates, and that of course is going to work against the value of stock markets. It’s probably worth noting that we have broken the neckline of a major head and shoulders pattern in most US indices, and therefore the next couple of days could be rather drastic. After all, if we were to continue dropping below the 200-Day EMA, we could see a massive breakdown.

In the short term, a rally may come, but I don’t necessarily think that we have the proper “narrative” to get the market going. Quite frankly, what we had seen over the last couple of weeks could be classified as “exit liquidity” being formed, meaning that larger funds have sold stocks to the retail public again. After all, most of them were in the same handful of stocks, and as long as those same handful of stocks such as Apple, Microsoft, Nvidia, etc. struggle, then you’re going to see the S&P 500 itself struggle. Wall Street is very “mind hive” in its trading, and therefore as a handful of stocks go, so goes the entire marketplace.

With yields in America offering a 5% return, it quite frankly is not worth wasting your time getting overly speculative, and that’s what you were seen in the stock indices. It’s not that you can’t make money to the upside, it’s just that the risk to reward ratio is suddenly shrinking. That being said, stock indices are not designed to fall over the longer term, otherwise they would be equal weighted. Remember that it’s just 7 to 10 stocks that move the entire S&P 500, and therefore you need to pay attention to all the same names. If they start rising, that will drag the index up with it.

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