InterMarket Analysis Update for Monday April 7, 2025

Link to The SPX Investing Program https://spxinvesting.substack.com/

Summary of the "Intermarket Analysis Update" prepared for Monday, April 7th, 2025:
This update analyzes various markets beyond the S&P 500 to gain insights into its potential future performance. It covers historical and forward-looking valuations, growth versus value, inflation concerns, other markets, S&P 500 sectors, additional indexes (including bonds), correlations, and long-term trends. A positive and negative list is provided at the end, showing no significant changes despite a notable down week.
Key Points
1. Valuation:
Historical PE ratios indicate the S&P 500 remains expensive (above 20), though declining. A drop to $4,000 would align it with a PE of 20.
The Shiller PE ratio (31.31) also shows the market as overvalued compared to its median/mean (16-17).
Forward-looking PE ratios are decreasing: S&P at 18.2 (fairly priced), mega caps above 20 (still expensive), mid-caps at 13.2, and small caps at 12.9.
Sector PEs vary: energy (14) and financials (16) are cheapest, while tech, industrials, and discretionary remain expensive.
2. Growth vs. Value:
Growth stocks dropped 6.5% and value 5.5% in Friday’s session, both falling below their 200-day moving averages.
Growth-to-value ratios are weakening, signaling a shift to a more defensive market posture, reminiscent of late 2021 into 2022.
3. Inflation:
The CRB Index fell sharply but shows no strong long-term inflation signal; deflation is more evident.
Other indicators (e.g., Baltic Dry Index, oil in the low 60s, aluminum, wheat) suggest deflationary pressures over inflationary ones, though lumber and natural gas hint at mixed signals.
Copper remains in an uptrend, suggesting economic optimism, but a decline could shift this view.
4. Other Markets:
Gold is outperforming oil and silver, with the gold-to-silver ratio spiking. The U.S. dollar is weakening against the euro and yen.
Bonds are rising as a safe haven, with yields falling across maturities.
5. Sectors and Indexes:
Defensive sectors (staples, utilities, health care) are outperforming the S&P 500, while growth areas (tech, discretionary) are underperforming.
Small caps, mid-caps, and tech (including semiconductors) are showing significant weakness.
The Dow is holding up better than the transports or broader indexes such as the NASDAQ (in bear market territory).
6. Correlations:
Strong correlations exist between the S&P 500 and oil, the dollar, and yields—all trending downward.
Bonds and stocks are moving inversely, with bonds outperforming.
7. Long-Term Trends:
Monthly charts (e.g., NYSE, S&P 500) show breakdowns below their 12-month moving averages, with momentum oscillators indicating longer-term weakness.
8. Positive/Negative Lists:
Positives: Growth, value, copper, gold, bonds, and certain indexes (e.g., Dow, mega caps) remain in uptrends despite recent hits.
Negatives: Semiconductors, small/micro caps, and mid-caps are in downtrends; tech and high-leverage loans are weakening.
The analysis suggests a market under pressure, shifting toward defensiveness with deflationary signals outweighing inflation fears, though some economic indicators (such as copper) remain cautiously optimistic.

PDF of Charts and Slides used in today's video:
https://drive.google.com/file/d/1tEzUaTnHBBz-VISiCO5UWYigVNnYweZg/view?usp=sharing

My Exclusive Free Workshop: The Four P's of Building a Successful Investing Program → https://spxinvesting.mailchimpsites.com

Facebook Private Group:
https://www.facebook.com/groups/667271964721864

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!