S&P 500 Weekly Price Forecast – stock markets take a dive this week

The S&P 500 initially tried to rally during the week but continues to find plenty of resistance at the 2950 handle. By finding sellers there, the market then rolled over and then on Friday the bloodbath really picked up steam. · FX Empire

Christopher Lewis

Updated Fri, Oct 5, 2018, 10:51 PM

The S&P 500 sold off rather drastically during the week, breaking down below the 2900 level, and looking likely to test several support levels. The 2875 level is a bit of support, just as the uptrend line of course will as well. I think that buying the dips makes sense, but right now we need some stability on at least a daily chart. We are still in and uptrend, regardless of what has happened over the last couple of sessions, so I simply waiting for a value play is probably the best way that longer-term traders can get involved.

I think at this point, the market still wants to go towards the 3000 level, but it will take some time to get there. People are still worried about interest rates rising, but quite frankly I think cooler heads will prevail and we will see another attempt to the upside. Until we break down below the uptrend line, we are by the very definition in and uptrend so I don’t have any interest in trying to short this market. However, if we break down below the bottom of the uptrend line, then I think the 2800 level gets targeted, and then perhaps even the 2700 level after that. Expect a lot of volatility but I would be a value hunters at this point and nothing more than that. If we were to turn on a break down below the 2800 level, that would be the beginning of a significant selloff.