S&P 500 Weekly Price Forecast – S&P 500 tumbles

The S&P 500 broke down rather significantly during the week, slicing through the 2800 level, the 2750 level, and then reached towards the 2700 level. This is a horrific looking candle on high volume, which generally leads to more selling given enough time. It looks as if the Federal Reserve tightening is going to continue to scare the market off, and at this point I don’t see a reason why this is going to end. Don’t get me wrong, I’m not saying that we can’t rally, and quite frankly it wouldn’t surprise me at all to see that happen. However, I also believe that we will eventually get an exhaustive candle that we can start shorting. You may wish to look at the daily chart for the entry, but it certainly looks as if we have broken down significantly. The alternative would be to sell underneath the 2700 level, because breaking below that level would be a significant turn of events.

If we do that, I think the 2500 level will be targeted eventually. Stock markets clearly have changed their attitude recently, but I think at this point it’s almost impossible to ignore as the move has been so brutal. We have wiped out gains from several months in one short week. There’s the old saying that “stock markets take the stairs up, and the elevator down.” I think that’s what we are seeing. I’m not looking for some type of massive meltdown but I also recognize that this type of selling doesn’t typically end up being a “one-off event.”

S&P 500 Video 15.10.18

This article was originally posted on FX Empire

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