The S&P 500 breached the second key fundamental resistance – the 100dma. The bear market rally continues supported by the Fed’s dovish pivot last week- the Fed indicated that interest rates are likely in the neutral range now.

However, the real interest rates are falling, which possibly indicates the flight to quality before the highly anticipated recession. S&P 500 will likely start pricing in the slowing economy – which will bring the next leg down, and possibly the new lows. We are in the bear market – and currently experiencing the bear market rally, which could be near the end. I am downgrading to Neutral (from Buy).

Here is the full report.