Week of 11/28-12/02 Will the Bubble Burst?!

The hottest announcement this week came from a speech at the Brookings Institution Washington, D.C. where Jerome Powell signaled that smaller interest rate hikes are likely ahead of us. With the next rate hike set December 14th, it could just be an early Christmas stock market rally or another glass of sour milk to investors to digest. After the FED's announcement on Wednesday Nov 30th, the market surged 4% and broke previous resistance levels with the the SPY settling at 408 points. Strong job and wages reports came out on Friday which indicate that the FED's job is not done yet and it seems to be in conflict with what Powell stated on Wednesday. Similarly, stocks dipped on Friday which gave up some of the gains from the recent surge. This price action is extremely similar to what we have seen in the market the last six months. One big day of gains followed by sideways action that eventually turns into a breakdown.