S&P 500 Price Forecast – Stock Markets Continue to Consolidate

Technical Analysis of the S&P 500

The S&P 500 had some bumpy trading on Wednesday as there were still many uncertainties surrounding the state of the world economy. The minutes from the FOMC meeting will be released later today, and Friday will see the release of the employment report. Having said that, I believe it's only a matter of time until we have to make a greater choice, so by the end of the week, I believe we will have much more clarity on our course of action.

Despite Wall Street's seeming lack of concern most of the time, the economy does not sustain a robust stock market. They will be more surprised to learn that the Federal Reserve is likely to maintain its strict monetary policy, which will keep the S&P 500 under pressure as Wall Street looks for cheap money since many of the bigger companies are leveraged to very aggressive levels.

They're going to have big problems as long as that continues to be the case. Additionally, this year is going to see a number of credit occurrences, which is poison to stocks. In the meantime, though, we could see rallies, but I believe the 50-Day EMA above around the 3900 level may provide substantial resistance. A move above there makes it possible to seek the 4000 level, but I believe that at that point, opposition becomes much more aggressive.