S&P 500 Weekly Price Forecast – stock markets continue to show resiliency
The S&P 500 fell as low as 2800 on Wednesday, as the Turkish lira crashed and sent the US dollar higher, and fears of contagion around the world shook the markets. Beyond that, the market had quite frankly been a bit overstretched. We did find support at 2800 though, and it ended up being an excellent buying opportunity. At the end of the week, we are forming a bit of a hammer that is preceded by shooting star so this shows that we could find ourselves in a bit of the trading range, as traders will be coming back from vacation early September. Right now you only have junior traders on the desks, so it’s hard to tell what they have been told to do. We are close to all-time highs though, so that’s something that should be paid attention to. If we can make a fresh, new high then you would have to think that the S&P 500 would go shooting higher, perhaps reaching towards the 2900 level.
Your capital is at risk
If we were to turn around and break down below the 2800 level, then I think that you could probably make a case for selling. However, right now I don’t think we have that going as it looks as if the Chinese and the Americans may be trying to warm relations. On the currency front, it looks as if the US dollar may soften a bit in the next couple of weeks, and if that’s the case that should propel this market higher as well.