Key Points The S&P 500 has delivered gains of 15% or more for three consecutive years only eight times since 1926. There's no clear historical pattern regarding what happens in the fourth year after a hot streak for the index. Investors should focus on a more important S&P 500 trend. 10 stocks we like better than S&P 500 Index › A lot can happen with the stock market during the last two and a half weeks of the year. Stocks could tank in a year-end meltdown. A powerful surge may begin. Or the S&P ...

Market Overview - The S&P 500 Index (SPX) has recently broken out of a trading range, reaching 6,584.29, which is 10% above its 2024 close [2] - Key economic data, including a hotter-than-expected producer price index (PPI) and worse-than-expected jobless claims, influenced this breakout [2][3] Federal Reserve Expectations - The probability of a rate cut at the upcoming Federal Open Market Committee (FOMC) meeting increased from 89% to 95% [3] - The likelihood of at least 75 basis points of easing after the December FOMC meeting rose from 65% to 76% [3] Historical Context - Historical patterns suggest a 70% chance of the market being higher from one week to one month after similar trading conditions were observed since 2017 [5] - The SPX is currently 1% above its August close, with two weeks of trading left in September, raising concerns about potential setbacks due to economic factors and seasonal patterns [7] Technical Analysis - The SPX is in extreme overbought territory, measured at two standard deviations above its 50-day moving average, which has historically led to corrections [8] - The SPX's 30-day moving average is currently at 6,438, projected to rise to 6,473 by the end of the week [16] Investor Sentiment - Despite new highs in the market, short interest in the Russell 2000 Index (RUT) is at an all-time high, indicating a lack of euphoria among many small-cap equities [10][13] - Total short interest on SPX components is near a multi-year high, suggesting caution despite the market's upward momentum [13] Market Momentum - For a market correction to occur, there must be signs of deteriorating momentum, specifically a definitive close below the SPX's 30-day moving average [15]

Market Overview - The S&P 500 has reached 6600, driven by stock/sector rotation and the anticipation of rate cuts, providing new momentum for the rally [1] - The target of 7000 is considered achievable, with confidence expressed in reaching this milestone [1] Analyst Insights - Andrew McElroy, Chief Analyst at Matrixtrade, utilizes a proprietary top-down system developed over 15 years, incorporating fractals, Elliott Wave, and Demark exhaustion signals, along with macro drivers and market narrative analysis [1] - The 'Daily Edge' newsletter offers actionable ideas, directional bias, and important levels in the S&P 500, focusing on various asset classes including commodities, stocks, crypto, and forex [1] Investment Strategy - The analysis emphasizes a systematic approach to trading, moving beyond simple chart observations to a comprehensive strategy that has been proven to deliver consistent results [1]