S&P 500 Daily Update for Wednesday August 6, 2025

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

Link to The Daily Pivot Newsletter: https://thedailypivotnewsletter.substack.com/

Join to get access to perks:
https://www.youtube.com/channel/UCxlaGAKm2ApEs13O1gWDltg/join

Market Update Summary for Tuesday, August 5, 2025
Outlook for Wednesday, August 6, 2025
Market Performance:
S&P 500: Closed at the 6,300 level, down 0.49% with above-average volume, losing the 20-period simple moving average, signaling a short-term negative outlook. The index opened higher but failed to reach R1 (6,350), dropped below the daily pivot (6,311), found support at S1 (6,291), and oscillated around 6,300.
Small Caps: Outperformed relatively, up about 0.5% (S&P 600 and Russell 2000), showing signs of an uptrend with a potential golden cross forming.
Other Indices: NASDAQ fell below 20,900, Dow below 44,000, and NASDAQ 100 struggled below its daily pivot point. Major stocks (Nvidia, Microsoft, Meta, Google) were down, while Amazon was slightly up.
Economic and Market Sentiment:
ISM Services Report: Came in weaker than expected at 50.1 (vs. 51.5 forecast), raising stagflation fears (high inflation, low growth). This followed a weaker-than-expected employment report from last Friday, contributing to market apprehension.
Trade and Tariffs: President Trump’s announcement of potential tariffs on semiconductors and pharmaceuticals negatively impacted these sectors. Trade balance improved slightly (-60.2B vs. -62B expected), but exports and imports are declining year-over-year.
Sentiment Indicators: Market sentiment remains positive but weakened (e.g., sentiment at 55, on the border of neutral). The VIX is below 20 but showing seasonal tendencies to rise in August, indicating potential volatility. Overbought/Oversold index is declining but still in overbought territory.
Technical Analysis:
Short-Term: Negative due to the S&P dropping below the 20-period simple moving average, with multiple oscillators (e.g., stochastics, MACD, slope) confirming bearish momentum. Smart money indicators (accumulation distribution, Chaiken money flow) are also negative.
Intermediate-Term: Still positive but showing weakening trends (e.g., ADX declining, PMO negative). Growth-to-value ratios for large and mid-caps remain positive, though small caps weakened slightly.
Long-Term: Remains positive, with the S&P above 150- and 200-period moving averages, but vulnerabilities are emerging.
Other Factors:
Federal Reserve: No major changes, but anticipation grows for a potential rate cut in September. The dollar and interest rates (10-year yield at 4.2%) were largely unchanged.
Corporate Activity: Record corporate buybacks signal market health, but insider buying is low, suggesting caution. Earnings beats are positive, but misses are significant.
Sector Performance: Defensive sectors (materials, real estate, energy) outperformed, while tech and communication lagged.
Outlook for Wednesday, August 6, 2025:
Bias: Short-term negative due to recent declines and technical indicators. Intermediate and long-term trends remain positive but show signs of weakening.
Key Events: MBA mortgage applications, geopolitical developments (e.g., Israel-Gaza), and upcoming economic reports (Thursday’s jobless claims, productivity, and unit labor costs) may influence markets. A 10-year note auction could also impact sentiment.
Seasonality: Mixed, with neutral-to-negative for the Dow and neutral-to-positive for the S&P and NASDAQ, but historical post-election year weakness in August is noted.
Conclusion:
The market is shifting to a more negative short-term stance due to economic concerns (stagflation, weak employment, and services data) and technical breakdowns. While intermediate and long-term trends remain positive, vulnerabilities are increasing, and investors should monitor upcoming data and geopolitical developments closely.

PDF of Slides:
https://drive.google.com/file/d/1CAqwU0yAGHspVtnJxRaoxo_8d80SIqED/view?usp=sharing

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!