S&P 500 Price Forecasts – Market Bounces From Oversold Condition

Technical Analysis of the S&P 500

The S&P 500 originally declined during Monday's trading session, although at this point it is a little oversold and we are close to a significant support level. Having said that, I believe we are in a situation where a short-term relief rally will occur. A little bounce does make some sense. Having said that, I don't believe it's necessarily going to be something that can endure; I simply believe that things have out of hand.

The 50-Day EMA would come next, and the 3800 level above would most certainly be a strong hurdle.

Since the market has been declining for quite some time, a short covering recovery might eventually occur. However, if you look at the last several weeks, it has been very tough for buyers to gain any momentum. In the end, I do believe we could drop below the lows, though not necessarily immediately away. In the end, the 3600 level and perhaps the 3500 level make a lot of sense.

I believe that many investors are attempting to exit their short positions in order to benefit as it is clear from this chart that the slope of change was exaggerated. Although there is a negative correlation between the two markets, which should persist, I do believe that you will need to pay close attention to it because the interest rate market has been such a significant factor in where we are going.