S&P 500 Price Forecast – Stock Markets Nervous Ahead of CPI

Technical Analysis of the S&P 500

As we wait for the CPI numbers, the S&P 500 E-mini contract has decreased somewhat during Wednesday's trading session. Considering that CPI statistics will almost probably favor the Fed tightening, it makes natural at this stage that we would experience some negative. Having said that, there is virtually always a story being told on Wall Street to raise stocks, if only momentarily. Keep in mind that Wall Street is there to sell you stocks. Follow the money, in other words.

The market is currently negative and has been for some time. There is also no genuine reason to believe that the economy is improving, which would cause the stock market to soar. As a result, I believe it will most likely only be a matter of time before this market breaks back down to the 3750 level, then the 3700 level. There is an important support level at 3600, and breaking that level would definitely cause the market to tremble since it would be a crash through support.

On the plus side, the perma-bulls may rush in and drive this market above the 3900 barrier if the CPI statistic comes in lower than expected. We will probably certainly test the 4000 level at that point. I believe there is a lot going on in the 4000 level area that would make it challenging to break above, including the 200-Day EMA racing toward it. If all else is equal, I like to sell rallies in this market, thus the CPI number might present me with that opportunity.