Post #15366

Santa Rally Remains Intact The S&P 500 held the 6,500 support zone perfectly on Friday as dip buyers showed up right on cue. For now, the Santa Rally setup remains intact, but last week was a reminder of how fragile sentiment is — rate-cut expectations and AI overvaluation can flip the market fast. Rate-cut bets surged after a key Fed official turned dovish, lifting December cut expectations sharply. At the same time, concerns around stretched tech valuations and speculative froth remain top of mind. With limited data due to the shutdown delays, every new release carries extra weight. Possible Outcomes: - Bull Case: If rate-cut odds stay elevated and volatility cools, the index could continue the seasonal push higher. - Bear Case: Any shift toward hawkish Fed messaging or renewed stress in tech could break the 6,500 zone — opening the door to deeper downside. This week brings retail sales and PPI, key reads heading into the holiday shopping stretch. - Alan