Analyst Urges Caution on S&P 500 Despite Recent Rebound
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Technicals show SPY rebounded strongly in November, aligning with historical seasonal patterns. Stochastic indicator and MACD suggest upward trend is just beginning.
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Bulls believe Fed's hawkish pause is temporary. Rate cuts expected in 6-9 months as soft landing occurs. S&P earnings beats indicate positive corporate performance.
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Author believes rebound driven by Fed pause and high earnings expectations. Unemployment needs to rise sharply for rate cuts. Forward indicators like housing sales declining.
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Bullish views overlook Fed's mandate of price stability and full employment. Earnings growth through 2024-25 seems unlikely.
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Author suggests staying on sidelines regarding SPY despite upside risks. Focus on truly undervalued small caps instead.