The S&P 500 is poised for its fourth major rally of the year, driven by strong month-end pension buys and a rebound in sentiment. According to Goldman’s Flood, the index is targeting key levels at 6721 (50-day moving average) and 6711 (CTA trigger), after easing pressure from computerized trader activity (CTA) by $1.8 billion next week compared to $12.8 billion last week.

The rebound in sentiment is also reflected in the CTA pressure, which has eased sharply despite a continued increase in open interest and high-frequency trading (HFT) demand for OpenAI-linked names, ORCL, CRWV, and NVDA. This suggests that investors are becoming more confident in their positions, leading to increased buying activity.

Macro tailwinds continue to support the market, with odds of a December rate cut jumping 29% to 82%, and buybacks surging by 1.4 times the YTD average. This open window for buybacks runs through December 19, 2025, providing a potential boost to the market in the coming years.

Overall, the combination of strong pension buys, rebounding sentiment, and macro tailwinds suggests that the S&P 500 may continue to rally in the near term, with more highs expected in the future. However, investors should remain cautious, as positioning remains neutral despite 36 all-time highs this year, indicating a bullish wall of worry that could potentially lead to a correction if not managed properly.