After Fed Chair Powell's speech at Spelman College in Atlanta on Friday, the markets became almost certain that the Fed will cut rates in May next year. It is currently unclear which his comment supported such expectations, considering that Powell for one more time noticed that rate cuts are not in the store and that there is a potential for another rate hike in case of persistent inflation. However, the economic figures posted during the previous week are also not in line with Powell's comments. The US economic growth reached 5.2% in Q3 which beat all market expectations and forecasts. Such developments pushed the value of the S&P 500 index to the level of 4.594, where the index last stood in July 2023.
The index is currently moving within heavily overbought territory for the last two weeks. This is indication that a short reversal might be in store within the following week. However, as long as the market optimism is in a hype mood, a short reversal might be postponed. A break of 4.600 level to the upside, would certainly open a path of S&P 500 to the level of 4.700 and above. In case of a short term reversal from current levels, then the next target of the index might stand at 4.500.
The index is currently moving within heavily overbought territory for the last two weeks. This is indication that a short reversal might be in store within the following week. However, as long as the market optimism is in a hype mood, a short reversal might be postponed. A break of 4.600 level to the upside, would certainly open a path of S&P 500 to the level of 4.700 and above. In case of a short term reversal from current levels, then the next target of the index might stand at 4.500.
