Be cautious ahead of Powell speech

Yesterday's trade picked up where Friday's left off, building up gains based on a belief that the Fed won't have to raise rates as much as feared and that the U.S. economy may see a "soft landing" after all. That thinking fueled buying activity in the bond and equity markets to start the day. The rally effort lost momentum, however, in the afternoon trade. The downturn coincided with Atlanta Fed President Bostic (not an FOMC voter) saying that the Fed is willing to overshoot when it comes to tightening, adding that the Fed should hold rates at 5% for a "long time". Ultimately, the S&P 500 closed below the 3,900 level.

Chart: SPX 15 mins
The FOMC chair powell speaking will be held around 9:00 AM, in today's pre-market trading all US indexes are on a downturn. But I am expecting SPX will hold somewhere around 3860ish, 3950ish is still unbreakable if there's no fundamental changes.

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