S&P 500 Weekly Price Forecast – Stock Markets Show Extreme Volatility

The S&P 500 has gone back and forth during the course of the trading week, as we are digesting the big move over the last five weeks or so. The 4250 level has offered a significant amount of support, ending up forming a hammer do to that bounce. Ultimately, we broke above there and then went much higher than that. Looking at this market, it looks as if we are going to try to break above the 4700 level and climb even higher.

S&P 500 Video 15.11.21

That being said, the market is likely to see plenty of buyers on dips due to the fact that the earnings season has been fairly reasonable, and that of course the overall momentum of the market is something that you cannot fight. The Federal Reserve, despite the fact that it is going to start tapering, is still going to be extraordinarily loose with its monetary policy, thereby driving money into the stock market as it has done for the last 13 years.

It is not until we break down below the 4250 level that I would be a negative trader, but even then, I would only be a buyer of puts, would not short this market. After all, every time you have tried to short this market for any length of time since the Great Financial Crisis, you have been playing with fire. Buying puts is a great way to minimize what could happen, at least on the downside for your account. That being said, it seems very unlikely that we have this happen anytime soon. All things been equal, I remain a “buy on the dips” type of trader.

For a look at all of today’s economic events, check out our economic calendar.