S&P 500: Long-Term Outlook
Karsten Kagels | May 24, 2021 08:45AM ET
The S&P 500 Index Futures is the world’s most traded stock index.
We would like to give an assessment of the future price development of the S&P 500 index futures using the daily, weekly and monthly charts. We also look at the long-term charts for the S&P 500, which are the quarterly chart and yearly chart with a logarithmic scale. The basis of our analysis is the Price Action and Technical Chart Analysis.
The charts used are from TradingView and the prices are from the CME.
h2 Moving sideways after recovery from March high/h2S&P 500 E-mini futures is trading at 4 151 points after recovering from a dip near above the high of March. The recent development shows a sideways phase.
Resistance Levels: 4 238.25 (All time high)
Support: Levels 3 983 | 3 862 | 3 753
Beginning from the October low at 3 225, the S&P 500 index futures is moving in an established uptrend. After reaching a new all-time high, we expect the uptrend to continue as long as the nearby support areas can be defended. On the flip side, prices below the March high would change the chart to a neutral expectation with possible sideways movement.
h2 Prices moving within the previous candle/h2S&P 500 is trading near 4 150 points. The uptrend on the weekly chart is intact and the market could receive support on march high.
Resistance Levels: 4 238.25 (All time high)
Support Levels: 3 983 | 3 862 | 3 753
The weekly chart looks positive. More upside potential with a continuation of the long term uptrend has a high probability. Only a drop below the September high at 3 587 could turn the positive weekly chart picture to neutral. Prices below the February 2020 high could turn the positive outlook of the weekly chart to negative.
h2 May reaches new record high/h2S&P 500 is trading above the April high and has climbed to new record high levels. We are looking at an established uptrend.
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A continuation of the uptrend in the monthly chart has the highest probability and in the longer perspective more price advance is possible. Only a drop below the February 2020 high at 3 397.50 could turn the positive monthly chart picture to neutral.
Resistance Levels: 4 238.25 (All time high)
Support Levels: 3 983 | 3 862 | 3 587
In the quarterly chart showing the price action from 2012 to the current year 2021, we can see the long term uptrend. S&P 500 has reached a new all time high in May. The market is trading above the major support of the February 2020 high which is located at 3397.50 points and also above the September high.
Resistance Levels: 4 238.25 (All time high)
Support Levels: 3 983 | 3 587 | 3 397
We expect S&P 500 to continue the long term uptrend. The quarterly chart is looking positive.
Very important is the February high at 3 397.50 which is key support. As long as the market is trading above this level, the outlook and bigger picture remains positive. Prices below 3 397.5 would worsen the chart picture and turn the bullish outlook to neutral or negative.
h2 S&P 500 Historical Chart and Long Term Outlook/h2In the yearly chart of the S&P 500 Index, which shows price history from 1910 until 2021, we can see the long term uptrend.
The price bar of 2020 is a so called outside bar. In this historical chart, the 20 years simple moving average (20 SMA) is also moving upwards. In the past, the yearly 20 SMA was last tested in the financial crisis of the years 2008/2009.
Potential Resistance is the all time high at 4 238.04
Support Levels: 3 247.93 | 2 490.91
SMA20: 1 891.48
We expect to see the S&P 500 resume the long term uptrend. Only a drop below the 2020 low at 2191,86 would turn the positive long term chart to neutral or negative. But this outlook has a very low probability of only 30 %.
h2 About S&P 500/h2S&P 500 — short for Standard and Poor’s 500, is a United States stock market index based on the market capitalizations of the top 500 companies that have common stock listed on the New York Stock Exchange or NASDAQ. With its headquarters in New York City and dating back to 1860, Standard and Poor’s has offices in 23 countries and maintains the SP 500 index. Over $1.25 trillion USD is indexed to Standard and Poor’s portfolio of indices, which includes the S&P 500. The S&P 500 index seeks to reflect the status of the whole stock market by tracking the return and volatility of the 500 most commonly held large cap company stocks on the NYSE, capturing approximately 80% of total market capitalization. The 500 companies comprising the SP500 span all major industries and are selected based on their market capitalization, liquidity, ability to be traded, as well as other factors. Additionally, the importance of the SP500 is highlighted by its use as an economic indicator of the health of the United States economy. (Source: TradingView)
*This price prediction is based on the data collected from various sources. This should not be considered as an investing parameter and user should do their own research before investing.
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