S&P 500 Price Forecast December 26, 2017, Technical Analysis

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The S&P 500 was a bit limp during the trading session on Friday, but volume would’ve been almost nonexistent as traders were more worried about Christmas than anything else. · FX Empire

Christopher Lewis

Updated Fri, Dec 22, 2017, 10:49 PM

The S&P 500 went sideways during Friday, and then drifted a bit lower to reach down towards the 2680 handle. This is a market that had almost no volume as traders were interested in Christmas, not trading. Longer-term, this is a market that has been very bullish, and I think that we will eventually see the buyers get into this market. Ultimately, I think that the next couple of sessions could be rather soft, as we have a serious lack of volume between now and New Year’s Day. However, I think once we get through the holidays there will be plenty of reasons to get involved, as the tax reform has given us a bit of a turbo boost for corporate proffers. The 2650 level underneath is the “floor” in the market, and I don’t think that we break down below there. I do believe that there will be plenty of value hunters underneath, and ultimately this market should reach towards the 2700 level again.

I suspect that we could get exaggerated short-term volatility, but once we get to January 5 or so, the buyers should overtake the market. In the meantime, keep your position size small, perhaps adding once the markets moving your direction. I believe that dollar cost averaging might be the way a lot of traders make money in this market going forward. The noisy conditions will scare a lot of traders, but in the end, I think the longer-term trend will prevail and therefore give us an opportunity to benefit going into the month of January. The stochastic oscillator isn’t in the oversold condition, but it’s very close.