US Stock Market Forecast Video for 01-02-2024

Advertisement

S&P 500 Technical Analysis

The S&P 500 has done very little during the trading session on Wednesday heading into the FOMC meeting. That being said, I think a lot of this is going to come down to the press conference and what the market reads into anything that Jerome Powell says. I think we could get a little bit of a pullback here, but that pullback, more likely than not, will end up being a nice buying opportunity.

I would love to see the S&P 500 drop down to the 4800 level, an area that previously had been significant resistance. The 4800 level, of course, is a major area of interest as we have previously seen significant resistance, and market memory in that area probably comes into the picture. The 50-day EMA is just breaking above the 4700 level, which, of course, the 4700 level is an area of massive support.

That being said, the market is likely to continue to be a buy-on-the-dip type of scenario, unless, of course, for some reason Jerome Powell completely spooks the market, but it’s worth noting that Wall Street has quite frankly ignored him up to this point. So with that being the case, I think even if we do get a little bit of a shock, it will only last a day or two before traders start to find yet another reason to buy stocks.

Remember, the S&P 500 is only a handful of stocks. It’s not 500 stocks that move the market because it’s not an equal-weighted index. So it can be manipulated quite easily through options buying companies like Microsoft. All things being equal, this is an uptrend that is very long in the tooth and has been around for quite some time and most certainly is overextended, but you can’t fight this type of momentum. You just cannot do it at this point. And I do think it’s probably only a matter of time before the S&P 500 reaches the crucial and psychologically important 5,000 level. That’s an area that I think will be very difficult to break above, but it does make a juicy target.

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