S&P 500 Price forecast for the week of March 5, 2018, Technical Analysis

The S&P 500 has been negative during the week, after initially tried to rally. After forming a hammer from last week, one would have thought that the market was ready to recover, however we had a surprise coming from Washington. · FX Empire

Christopher Lewis

Updated Fri, Mar 2, 2018, 9:39 PM

The S&P 500 initially tried to rally during the week, reaching towards the 2800 level. We found enough resistance there to turn things around and start selling off, which of course was exacerbated by Washington announcing that there were going to be tariffs against steel and aluminum coming next week. Because of this, we started to see traders get worried about trade wars, and that of course was negative for stocks. At this point, it looks as if we will continue to go bit lower, because breaking the bottom of a hammer is a significant deal. We are currently hanging about the middle band of the Bollinger Bands indicator, which is essentially considered to be “fair value”, and therefore it’s not a surprise that the market did bounce a bit.

However, I think there is a lot out there that could scare the markets, and I believe that we are going to continue to see selling pressure. The 2600 level will be targeted, followed by possibly the 2500 level. Ultimately, if we broke above the 2800 level, that would turn things around, but I think that there are a lot of concerns when it comes to this tariff situation, and therefore as long as that’s the case it’s likely that the general trading public will be a bit cautious about buying stocks at this point. If we break down below the 2500 level, that would be a very negative sign, and could send this market much lower.