S&P 500 Price Forecast – Stock Market Rallies Again On Election Day

Technical Analysis of the S&P 500

The S&P 500 experienced a big rally during Tuesday's trading session to surpass the 50-Day EMA. Although the 50-Day EMA is a popular signal, I believe that many traders are currently focusing on the upcoming US elections as the day's key event. In the end, the market is hoping for a stalemate in the US Congress, which would mean less regulation. Having said that, I believe that sooner or later reality may come in and the downward trend may continue.

We would reenter the previous consolidation region we had observed if we broke down below the 3800 mark. It's likely that we might decline to the 3600 level if we break down below the 3700 level, which marked the bottom of the most recent slump. All other things being equal, I believe that this market will continue to be very volatile, and moving forward, we might see a small "hopium" rally. If we were to break over the most recent high, then we could look at the 4000 level.

The 200-Day EMA, a longer-term trend indicator, is similarly drawn to the 4000 level above. However, I believe that we will soon begin to plummet once more, therefore the next day or two might be quite important. Since I have no desire to purchase this market, it is likely that there will be much chop and volatility in the future. Consequently, regardless of your choice of direction, you should maintain a manageable position size.