US500 maintains inherently bullish structureS&P 500SP:SPXWiseLeoTradingFundamental Analysis US500 maintains an inherently bullish structure, trading above both EMAs. Q3 earnings were strong, with 83% of companies beating expectations and delivering 13.8% blended EPS growth, largely thanks to megacap tech/AI. However, the forward P/E ratio is high at 23.1x (above the 5-year average of 19.9x), signaling elevated valuations. The recent profit taking in high growth names like AMD and Nvidia due to margin concerns and macro headwinds (high rates/inflation) exposes this valuation sensitivity. Technical Analysis The index is currently pulling back from all time highs near 6,900, consolidating in a short term support zone of 6,750. Momentum is neutralizing with RSI approx 51.6, indicating a pause rather than a reversal. Key technical battleground: Resistance at 6,885 and 6,920 versus support at 6,750 and the EMA at 6,700. Consolidation is the most probable short term path. Sentiment Analysis Sentiment is cautious to slightly negative. The sharp correction in AI leaders (AMD, NVDA) has fueled "AI bubble" fears, overriding fundamentally strong earnings reports. There is a clear, broad sector rotation occurring as investors de-risk and take year end profits from high growth tech toward defensive/value plays. The market is currently driven by nervousness about sustaining premium valuations against persistent macro uncertainty. Outlook The near term outlook is moderately cautious. While the long term bullish trend remains supported by healthy corporate earnings, the market faces an inflection point driven by overvaluation concerns in the tech sector. Further short term volatility is expected as the market digests earnings nuances (like margin guidance) and awaits clearer signals on US monetary policy and inflation. A decisive break of the 6,750 support or 6,885 resistance will likely define the next directional move. Analysis is by Terence Hove, Senior Financial Markets Strategist at Exness