After closing October on a positive note, the S&P 500 index (SPX) entered a correction phase following its record highs. The price movement is primarily driven by US Federal Reserve (Fed) Chairman Jerome Powell's comments, which cast doubt on further interest rate cuts. This uncertainty in monetary policy coincided with overbought conditions in the market, triggering a wave of profit-taking.
However, despite current fluctuations, fundamental factors remain stable. Companies continue to deliver strong results, keeping the market buoyant. Amazon, for instance, reported significant revenue growth in the cloud segment. Apple unveiled an optimistic outlook for the holiday quarter, even though there were some operational challenges. Furthermore, artificial intelligence (AI) keeps driving investment cycles and boosting profits of leading tech firms.
From a technical perspective, SPX is in a correction. The Stochastic Oscillator (5, 3, 3) is now exiting overbought territory, with the %K line crossing below the %D one, suggesting bearish momentum. Concurrently, the Chaikin Oscillator (3, 10), despite remaining positive, keeps falling from a local high, which indicates a loss of buying interest. The current price has adjusted by approximately 23.6% compared to the previous rally that began on October 17.
Both fundamental and technical analysis point to an ongoing correction in the stock market, which is taking place amid high performance and robust growth since the beginning of the year. A seasonal factor generally favors bulls, as November is traditionally a strong month for SPX. The trade agreement between the United States and China adds positive momentum.
Consider the following trading strategy:
Buy SPX as it corrects to the 6,760–6,900 range. Place Take profit at 7,000 and Stop loss at 6,670.
This forecast is valid from November 3 to November 7, 2025.
This content is for informational purposes only and is not intended to be investing advice.
