S&P 500 Weekly Price Forecast – S&P 500 Recovers After Selloff

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The S&P 500 pulled back a bit during the course of the week but has recovered the losses to show signs of stability and strength underneath. This makes quite a bit of sense, considering that the Federal Reserve is doing everything it can to keep the markets afloat. With that in mind, I do like the idea of buying dips, and I recognize that there are multiple areas underneath that offer support.

S&P 500 Video 12.07.21

The uptrend line of course is the first place that I would pay close attention to, but after that I would also pay close attention to the 4000 handle, as it is a large, round, psychologically significant figure, and of course an area where we had a small gap on the daily chart that should keep this market afloat. Breaking down below the 4000 level would of course be very negative, but at that point in time I would be a buyer of puts, and certainly would not be a seller of the index itself.

To the upside, I believe that the market will initially at the 4400 level, and then target the 4500 level as it is the next major psychologically significant figure that will attract attention. Because of this, the market is likely to continue to see an attempt to get up to that level, and of course buyers on dips because we are in such a strong uptrend overall. With this, pay close attention to the bond market, because it has caused a lot of headaches as of late. As long as that yield stays above the 1.25% level, traders will probably feel somewhat comfortable being long of this market.

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