Weekly Update for August 18-22, 2025

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

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

Link to Video-Only Immediate Access:
https://spxvideos.substack.com/

Market Update Summary for August 11-15, 2025
Market Performance:
The Dow set an intraday all-time high but gave up gains on Friday. The S&P 500 hit intraday and closing all-time highs earlier in the week. The NASDAQ and NASDAQ 100 also set multiple all-time highs.
Weekly gains: Dow +1.7%, S&P +0.9%, NASDAQ +0.8%, small caps outperformed despite late-week pullback.
Overall, the S&P 500 was up 0.94% for the week, with above-average volume on the weekly chart, though daily volume was below average.
Key Economic Indicators:
CPI: In line with expectations, boosting market confidence for a potential 25 basis point rate cut in September, with some speculation for a 50 basis point cut.
PPI: Stronger than expected, raising inflation concerns and tempering rate cut enthusiasm.
Interest Rates: Rose to 4.33%, still below 4.5%, potentially pressuring stocks if the trend continues.
Earnings: Mostly positive, with companies beating lowballed expectations, though less robust than in 2024.
Sector and Index Trends:
Small and mid-caps saw early-week strength but weakened later, with rotation into cyclical and smaller-cap names.
Healthcare (defensive sector) was the strongest performer but remains weak year-to-date. Tech and communication sectors showed resilience.
Financials lagged behind the S&P, raising concerns about potential sector weakness.
Technical Analysis:
The S&P 500 faces significant overhead resistance, with the S&P yet to close above key weekly resistance levels.
Trend indicators: Weekly ADX below 20 (non-trending), daily and intermediate-term trends strengthening and turning positive.
Momentum oscillators mixed, with some short-term indicators weakening but long-term trends positive.
VIX remains lower, but historical August-October volatility could emerge.
Sentiment and Other Factors:
Sentiment is moderately positive (Fear and Greed Index at 64, Investors Intelligence in the mid 2-range).
The dollar’s downtrend supports stocks, but a reversal could pressure equities.
Defensive sectors (healthcare, utilities) show mixed performance, with some risk-off tendencies late in the week.
Post-election year seasonality suggests potential weakness in August, historically down 10/18 times since 1950 with a -1.2% return.
Looking Ahead (August 18-22):
Markets are balancing optimism for rate cuts with caution over inflationary pressures (PPI, rising rates).
Key risks: Potential dollar strength which has yet to develop, Japanese interest rate hikes impacting U.S. bonds, and seasonal weakness.
Watch for continued sector rotation, small-cap performance, and whether the S&P can break weekly resistance for a bullish signal or face a pullback.
Conclusion:
The S&P 500 remains positive but faces resistance and mixed signals from inflation data and Fed commentary. Small caps and cyclicals show promise but are volatile, while defensive sectors are gaining some traction. Seasonal and historical trends suggest caution, with the potential for volatility in late August and September.

PDF of Slides:
https://drive.google.com/file/d/1j0TzrciL7_uUmc7S2EyQcaTUgvSh8TG9/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!