S&P 500 Price Forecast – Stock Markets Break Trendline

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The S&P 500 has fallen hard during the trading session on Monday, breaking below a major trendline. Furthermore, the market is below the 50 day EMA, something that catches a lot of people’s attention. With this being the case, it is very likely that the 4350 level is an area where we have seen a little bit of support. At this point though, it looks as if the market is trying to break down rather significantly, and if that is going to be the case, then I might be a buyer of puts. I will not get crazy to the short side, because quite frankly it is just so difficult to imagine a scenario where I am comfortable shorting a market that is so highly manipulated. At this point, the market is struggling overall, and I would be cautious about anything the Federal Reserve says or does.

S&P 500 Video 21.09.21

The 4300 level being broken probably opens even more stringent selling, but again, I would not be short of this market, rather I would be a buyer of puts. If we turn around to take out the top of the candlestick for the trading session on Monday, that would be a very bullish sign, and eventually make this a “false breakout”, something that causes a lot of trouble for short sellers.

Regardless, this is a market that I think will eventually find a reason to go higher, if for no other reason than the Federal Reserve stepping in and jawboning the market, or perhaps getting involved in the bond market. Yes, there are a lot of concerns out there when it comes to credit situations in China, but that being said Wall Street always seems to have a narrative that it hangs on to to start buying again.

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