S&P 500 rebound, looking to resume the party! – S&P 500 forecast

Intermediate
  • On Monday in our weekly Macro Watch publication we posed the question “Stocks dip – a deeper correction or a buying opportunity?” having last week highlighting that “S&P 500 keeps the party going!
  • Well both were in fact somewhat correct, with a deeper correction lower on Tuesday (after the US Labour Day holiday Monday), then a robust rebound effort on Wednesday to highlight the selloff as a buying opportunity.
  • The jury remains out though as to whether this is a sustainable recovery to restart the party, or if a still deeper correction awaits.
  • Our bias is for the party to resume and here we again focus on the future on the US benchmark stock average, the S&P 500.

S&P 500 future day trade outlook: Further bounce bias

Day trade update and view

A firm advance as we had looked for on Wednesday above 3376/80 and 3401/02 resistances, to build on the overnight rebound effort from 3295.5, to reject the negative tone from Tuesday’s significant sell-off through critical 3319.5 (to shift the intermediate-term bull trend to a wider range theme, 3190.25/88.5 to 3484.25), to leave a further rebound risk into Thursday.

Day trade setup

  • We see an upside bias for 3424.0 and the 3447.0/53.25 resistance area; a break here aims for key 3484.25 and maybe towards 3531.0.
  • But below 3350.5 opens risk down to 3326.0, 3295.5 and possibly even 3278.75.

S&P 500 future intermediate-term outlook

The early September sell-off below 3319.5 signalled an intermediate-term shift to a broader range seen as 3190.25/88.5 to 3484.25.

Upside risks: Above 3484.25 sets an intermediate-term bull trend to target 3587.0, the 3626/30 extension target area and 3709.75

Downside risks: Below 3190.25/88.5 sets an intermediate-term bear trend to target 3105.25, 3000.0, 2983.5 and 2923.75.

6 Hour S&P 500 Chart

sp 500 chart

Editor in chief

Steve Miley has 29 years of financial market experience and as a seasoned expert now has many responsibilities. He is the founder, Director and Primary Analyst at The Market Chartist, the Editor-in...continued

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