Daily Update Podcast for Tuesday September 16, 2025

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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!

Market Summary for Monday, September 15, 2025:
Outlook for Tuesday, September 16, 2025:
Market Performance on Monday, September 15:
All-Time Highs: The S&P 500, NASDAQ, and NASDAQ 100 set new all-time highs, driven primarily by mega-cap stocks. The S&P 500 closed up 0.47% on below-average volume, indicating a cautious market sentiment.
Market Dynamics: The market gapped higher at the open, stayed above the R2 pivot point, and moved sideways with some late-session weakness but closed above R2. The 6,600 level acted as a psychological resistance, now surpassed.
Internal Weakness: Despite new highs, internal indicators showed mixed signals, with declining new highs, a negative advance-decline ratio, and fewer stocks above their 20-period moving average, suggesting underlying market weakness.
Mega-Cap Strength: Growth-oriented mega-cap stocks (e.g., Google up 4.5%, Tesla up 3.5%, Amazon, Microsoft, and Apple up over 1%) led the rally, while defensive sectors such as staples underperformed.
Technical Indicators:
Short-term indicators (StochRSI, Williams %R, CCI) showing strong positive conviction, but the market is extended from the 20- and 50-period moving averages, with RSI 9 indicating overbought conditions.
Intermediate-term indicators remain positive, with the market above the upper Bollinger Band for three days and in the +3 standard deviation channel.
Long-term, the market is about 10.5% above the 200-day moving average, a level to watch for potential overextension.
Economic Context:
Interest rates declined, with the 10-year yield at 4.03%, testing 4% as support.
The markets are focused on the Federal Reserve’s anticipated 0.25% rate cut on Wednesday, with another expected in October. The “buy the rumor, sell the news” pattern is a potential risk.
Inflation concerns are minimal after recent PPI and CPI data showed no major red flags.
The Empire State Manufacturing Survey was weaker than expected at -8.7 (vs. +3 forecast), signaling regional economic softness.
Sentiment: Market sentiment is positive (58) but not extreme, lagging price action, which could indicate room for further upside as bearish investors may capitulate to the upside.
Key Economic and Market Factors:
Fed Expectations: The markets anticipate a rate cut, with focus on the Fed’s statement and press conference for surprises.
Earnings and Valuation: Earnings are rising across most S&P sectors, supporting higher stock prices. However, the S&P is trading at a forward P/E of 23, above the expensive threshold of 20.
Sector Performance: Technology, discretionary, and industrials are the strongest but most expensive sectors. Staples, communication, and materials are less overvalued.
Recession Risk: A 48% recession probability was noted by Mark Zandy, though other indicators suggest early-cycle economic signs, with businesses increasing hours and temps.
Outlook for Tuesday, September 16:
Key Events: Retail sales data, import-export prices, industrial production, capacity utilization, business inventories, and the NAHB housing market index will influence the market.
Seasonality: Historically, September 16 is positive, but the second half of September is the weakest period since 1950. Options expiration week is generally positive, though the following week tends to be weaker.
Technical Outlook: The S&P 500 remains positive across all time frames but faces potential overhead resistance at 6,650 (gamma exposure level). A decline could test the 6,600 level as support. Pivot points for Tuesday are close due to low volatility in recent sessions.
Risks and Opportunities: Positive momentum and growth stock outperformance support further gains, but internal weaknesses (e.g., negative McClellan Oscillator, declining advance-decline ratios) and overbought conditions suggest caution. A pullback to the 20-period moving average could occur if selling pressure increases.
Conclusion:
The S&P 500 is in an uptrend driven by mega-cap growth stocks, with positive conviction in the short term. However, internal weaknesses and overbought conditions warrant caution. Tuesday’s retail sales data and ongoing Fed expectations will be critical, with potential volatility around the Fed’s Wednesday announcement.