Technical Analysis: S&P 500 Has Broken Support

The S&P 500 broke a key trend line of support this week. This break signals a high probability that the S&P will move lower in the coming days/weeks to a downside target of 5,670. However, as long as the 5,670 level on the S&P 500 holds, it would still be considered an uptrend. This means that after tagging this level (assuming it holds), the S&P 500 could move to new all-time highs. The upside target if that happens is between 6,000-6,100.
The weakness in the stock market over the past few days has been due to interest rates continue their sharp rise. After the Federal Reserve cut rates by 50 basis points, the 10 year yield has done nothing but go up.
Investors should realize this signals that the Federal Reserve has no actual power to influence real rates unless there are no issues in the system. If issues arise, the markets ultimately set the level of interest rates.
The reason that rates have gone higher are two fold.
1. The economy is stronger than both investors and the Federal Reserve believed.
2. The U.S. national debt keeps spiking and no presidential candidate is showing even the slightest sign of reigning it in. The higher the debt goes, the higher the borrowing costs for the United States and its citizens.
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