S&P 500 Forecast: Slight Pullback to End Year

In this market, you have one of two choices: you can either be “correct”, expecting markets to behave like they should, or you can be “profitable.”

The S&P 500 pulled back in a shortened session on Friday as we continue to see a line of choppy behavior in the face of a serious lack of liquidity. That being said, the market is likely to continue seeing a little bit of a drift lower in the short term, only to see whether or not we will have buyers coming in on the dip. I see no reason to think that we will not, and I think it is only a matter of time before we see some type of value hunting going forward.

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To the upside, you can see that the 4800 level has been difficult to get above, but the fact that we struggled a bit should not be that big of a deal, considering that we have a serious lack of volume, and most people were not willing to get aggressive in the face of the holidays. That being said, this is a nice uptrend, and it has been for quite some time, so I think that when we look at this chart you have to look at this through the prism of the most recent swing high pulling back just a bit, but the next low will obviously be higher than the previous one. The 50 day EMA sits at the 4636 handle and is starting to rise in order to offer a bit of dynamic support underneath.

When I look at this chart, I do not see anything that suggests that we are going to break down, but I do recognize that the 4500 level would be crucial to pay attention to. If we were to somehow break down below there then we could have a more serious correction, but that is a long way from here and I think we would have plenty of warnings. Yes, we are already starting to get these dire predictions for 2022 and a major crash that is going to happen, but that happens this time of year every year. In fact, I can think of several well-known analysts that call for a stock market crash every year and have been doing so for at least a decade. In this market, you have one of two choices: you can either be “correct”, expecting markets to behave like they should, or you can be “profitable.”