The markets just hit a new high.

All thanks to the Federal Reserve’s decision to hold rates steady thanks to cooling inflation.  Plus, the Fed just set the table for three rate cuts in the new year. While that’s less than the expected four cuts, it’s still seen as aggressive.

“The Fed decision was more dovish than anticipated on a variety of fronts, including the acknowledgment that growth and inflation have both cooled, the strong signals that rate hikes are finished and Powell’s admission during the press conference that ‘rates are at or near their peak,’” analyst Adam Crisafulli of Vital Knowledge said, as quoted by CBS News.

At the moment, markets are pricing in a 75% chance of a rate cut by March.

After an impressive rally, Dow futures are up about 80 points at the moment. NASDAQ futures are also up about 80 points, with the S&P 500 up 16. And while the rally could continue for a bit longer, we’re concerned markets are considerably overbought.

If you pull up a chart of the Dow Jones, you can see the index ran straight from about 32,500 to 37,090 – which isn’t a sustainable move. At the same time, momentum indicators, including RSI, MACD, and Williams’ %R are all deep in overbought territory.

In short, be cautious.