S&P 500 What to Watch for Monday February 24, 2025

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This video, the last of the weekend series, reviews the past week’s market activity using charts divided into positive, negative, and watchlist categories.
Up until Friday, February 21st, the market appeared to be turning more positive, but a significant down day (options expiration) caused technical damage, prompting the question: Has the S&P 500 hit a short-term top? The analysis reflects a cautious stance, with the market at critical levels after closing near the 50-day moving average (around S3 support).
Positive Highlights:
Intraday Trends: Tuesday showed late-day buying, Wednesday clawed back from a lower open, and Thursday established a base with more late-day buying, all positive signals despite a down day. Friday, however, reversed this with a sharp drop to S3 and no significant bounce.
Growth vs. Value: Large-cap growth (blue line 50 SMA) still outperforming value (red line 200 SMA), a bullish signal, though growth weakened significantly. The S&P Growth-to-Value Ratio remains in a long-term uptrend despite falling below the 50-day moving average.
Discretionary vs. Staples: Despite a hit, discretionary has outperformed staples since last summer, though staples surged on Friday, hinting at defensiveness.
Large Caps vs. Small Caps: The ratio rose as small caps underperformed more than large caps, typically a market-positive signal.
ADX (Trend Strength): The weekly chart shows no trend (ADX below 20), but the green line above the red line keeps it positive.
VIX: Advanced but remains below 20, avoiding a strongly negative threshold.
Advance-Decline Line: Above its moving average for the S&P 500, though declining, with volume previously outpacing price (a positive sign until Friday).
Smart Money Indicators: Accumulation distribution (Indicator #1) remains positive, though pulling back from being extreme positive. The other two Smart Money Indicators have turned negative.
Moving Averages: The S&P held the 50-day moving average, with longer-term averages (100, 200) still rising.
Other Markets: The NASDAQ 100 is above its 50-day moving average, financials and total U.S. stock ETF held key levels, and stocks-to-bonds ratios suggest a soft-landing outlook.
10-Year Yield: Dropped below 4.5%, potentially supportive if it continues falling.
Negative Highlights:
Seasonal Weakness: Late February during post-election years are historically weak, aligning with Friday’s drop.
Smart Money Indicators: Chaikin Money Flow (#2) and Chaikin Oscillator (#3) turned negative after Friday’s decline, with high readings dropping sharply.
Vortex: Red line slightly above green (0.94 vs. 0.93), signaling a bearish tilt.
VIX Momentum: MACD turned up as the VIX spiked, a negative for stocks.
ADX Short/Intermediate: Short-term turned negative (red above green), and intermediate remains negative despite flattening.
Advance-Decline Oscillator: Dropped below zero over 10 days, with McClellan Oscillator and Summation Indices rolling over.
Momentum Oscillators: Short and intermediate-term indicators (e.g., TSI, KST) turned down; long-term TRIX weakened.
Bullish Percent Index: Fell below its moving average, though above 50.
Moving Average Breaks: S&P fell below 20-day averages, NASDAQ below 50-day, Dow below 50-day, and small caps (S&P 600) below 200-day.
Trend Channel: The S&P struggles with long-term resistance (2009 channel), suggesting a potential top.
Non-Confirmations: The S&P hit all-time highs, but the NASDAQ didn’t confirm; equal-weight QQQs hit highs, but equal-weight S&P didn’t confirm.
Sector Weakness: The FAANG Index, Small Caps, Mid-Caps, Banks, and Home Construction weakened, with staples spiking vs. the S&P (defensive shift).
Watchlist:
Jobless Claims: Initial claims rose, but the 4-week average declined; continuing claims are sideways.
SKEW Index: High readings persist, expecting a move, yet still high after Friday’s drop.
Cash & TIPS: Cash-to-bonds ratios holding up, but TIPS vs. longer bonds rose, hinting at inflation concerns.
Japan 10-Year Yield: Rising, a potential risk factor.
Oil & Dollar: Oil fell to the low 70s; the dollar remains in a long-term uptrend but pulled back short-term.
Conclusion:
The market was positive mid-week with the Smart Money buying, but Friday’s drop shifted sentiment. The S&P 500 is not trending (short, intermediate, or long-term), with short-term damage evident, though intermediate and long-term trends remain positive for now. Key levels to watch include the S&P’s 50-day moving average, NASDAQ pivot points, and small-cap 200-day averages. Mixed indicators prevent a clear directional bias.
DISCLAIMER This video is for entertainment purposes only. I am not a financial adviser, and you should do your own research and go through your own thought process before investing in a position. Trading is risky.