All Time Highs piercedAfter the announcement of the FED to reduce interest rates, this attracted new money to the market, which made it easy to break the resistance at the All Time Highs (4670) level. What's next is the short term traders will be taking profits and the bears will be taking every dip to exit their short positions, creating pressure to the upside.
My forecast is this will be battling until the price corrects and the 21MA catches up with the price level. At that point the uptrend will resume.
We saw yesterday at 2:00 pm EDT that after the announcement of -0.5 in the interest rates the market skyrocketed creating a new intraday ATH, this was faded almost immediately, followed by wild swings to the upside, and downside, this conference was different from previous ones because of the battle between the high and the low of the session. Basically this was a "shaking the tree" scenario.
The momentum is showing a Negative Divergence in both the Daily and Weekly timeframes (higher levels, lower momentum), this forecasts a market reversal. We'll see a continuation of the uptrend, which will trigger a frenzy buy spree, the market is going to enter in a highly greedy phase, and if you follow the market history, this is the point where the institutional market will get liquidity before the big drop. I don't forecast a strong reversal in the short term, but probably next year. The institutional market needs lower interest rates to go shopping at lower prices, that is the point where we'll see a very aggressive reversal caused by panic selling.
Unemployment ticked up, Oil ticked up. This hints a market cool down. Still we're in full employment levels, nothing to worry about at this time. These are not recession levels, just slowing down, which are a good timing to start lowering interest rates. It may create a bit of inflation, but let's see how the balance of the FED interest rates equation behaves, inflation + employment + GDP.
Higher index levels, lower momentum, lower inflation, employment in check, a 0.5 interest rate cut. Looks good, specially in an election year, which historically is a triggering element for volatility.